Jefferies global head of equity strategy Christopher Wood has removed a 10% Bitcoin allocation from his model portfolio, citing concerns that quantum computing advances could undermine the cryptocurrency's security and its viability as a long-term store of value for pension-style investors.
What Happened: Quantum Concerns Prompt Exit
Wood announced the move in his "Greed & Fear" newsletter.
He pointed to growing concern within the Bitcoin community that quantum computing "could only be a few years away rather than a decade or more."
The Bitcoin network relies on cryptography to secure tokens and validate transactions. Today's computers cannot crack that cryptography in any practical sense.
Quantum computers could change the equation, potentially allowing attackers to reverse-engineer private keys from public ones.
Wood wrote that any threat to the mining process "is potentially existential as it undermines the concept of Bitcoin as a store of value and therefore as a digital alternative to gold."
Wood was an early institutional supporter of the cryptocurrency, adding it to his portfolio in Dec. 2020 amid pandemic-era stimulus and dollar debasement fears.
He increased the allocation to 10% in 2021. Now, he is replacing that Bitcoin weighting with a 5% allocation to physical gold and 5% to gold-mining stocks.
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Why It Matters: Debate Intensifies
The debate over quantum threats to Bitcoin heated up after the token's Oct. 10 slump last year. Prominent developers pushed back against the idea that quantum computing posed an imminent risk.
Nic Carter, a partner at Castle Island Ventures, said in a December post on X that Bitcoin developers are "in denial" about quantum computing risk. Blockstream's Adam Back rejected that characterization.
Justin Thaler, a research partner at a16z and computer science professor at Georgetown University, published the analysis arguing that "timelines to a cryptographically relevant quantum computer are frequently overstated — leading to calls for urgent, wholesale transitions to post-quantum cryptography."
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