Wall Street Analyst Cites Quantum Computing Risk, Drops Bitcoin for Gold

Christopher Wood, global head of equity strategy at Jefferies, has removed Bitcoin from his model portfolio due to concerns that quantum computing could threaten the cryptocurrency's cryptographic security. The strategist cited accelerating progress in quantum technology as a growing risk for long-term investors.

Wood previously maintained a 10% allocation to Bitcoin, which he now views as increasingly vulnerable to quantum decryption attacks. He replaced the position with a 5% allocation to physical gold and another 5% to gold-mining equities.

Quantum computing, once seen as a distant threat, is now perceived as a more immediate risk. Wood warned that such machines could compromise Bitcoin's public-key cryptography, potentially undermining its role as a digital store of value.

Why Did This Happen?

The shift in portfolio strategy is based on the view that quantum computing could arrive sooner than expected. This development raises concerns about the long-term viability of cryptographic systems underpinning Bitcoin.

Wood is not the only investor to raise concerns. Nic Carter of Castle Island Ventures noted that institutional capital is increasingly worried about unresolved quantum risk, while developers remain in denial.

Bitcoin's price decline since late 2025 has also fueled skepticism about its resilience against systemic and technological threats.

How Did Markets React?

Bitcoin's price has seen a consolidation phase, trading between $95K and $96K. While the price remains above recent lows, the market is digesting the structural concerns raised by institutional investors.

Gold, on the other hand, continues to outperform, with a 44.79% recovery from its 2025 low. The precious metal is seen as a hedge against geopolitical and monetary risks, reinforcing its appeal in a volatile global landscape.

What Are Analysts Watching Next?

Bitcoin developers argue that quantum computing remains years away from posing a real threat. Adam Back of Blockstream estimates that breaking Bitcoin's cryptography is at least 20 to 40 years off.

However, market sentiment has already priced in some level of risk. The debate between capital allocators and developers reflects a broader tension in the crypto ecosystem. While technical teams work on post-quantum migration, investors are factoring in potential vulnerabilities.

Bitwise analysts have also supported a dual allocation to Bitcoin and gold, showing how the combination improves risk-adjusted returns. Portfolios with a 15% split between the two assets have shown a Sharpe ratio three times higher than traditional 60/40 portfolios.

The market's response to quantum risk will likely influence long-term investment strategies. As quantum computing moves from theory to reality, the ability of blockchain networks to adapt will be closely monitored.

Despite the uncertainty, Bitcoin's resilience remains a key factor. The market has yet to fully price in the scale of risk, and the next few years will determine whether institutional investors continue to shift away from digital assets.