According to Bloomberg, Christopher Wood has reduced the Bitcoin weighting in his model portfolio to zero, expressing concern that advances in quantum computing could weaken Bitcoin’s long-term security and its role as a “store of value” for institutional investors.
Wood, who is the head of global equity strategy at Jefferies, completely exited his Bitcoin position, which he previously held at around 10%.
In the latest issue of “Greed & Fear,” Wood noted that quantum computing is advancing faster than expected, and that this development could weaken the thesis that Bitcoin is a reliable store of value, especially for long-term investors such as pension funds. He added that concerns are growing within the Bitcoin community that quantum computing could become a serious threat “not in a decade or more, but in a few years.”
The Bitcoin network relies on cryptography to verify transactions and secure assets. While it’s practically impossible to break this encryption with current computers, it’s suggested that quantum computers could potentially allow private keys to be derived from public keys. According to Wood, this risk is “existential” not only for transactions but also for the cryptography underlying the mining process, calling into question Bitcoin’s position as digital gold.
Wood was one of the early institutional supporters of Bitcoin. In December 2020, amidst concerns about expansionary policies implemented during the pandemic and the depreciation of the dollar, he added Bitcoin to his model portfolio, increasing its total weighting to 10% in 2021. However, following the recent decision, he replaced this share with 5% physical gold and 5% gold mining stocks.
The debate surrounding the impact of quantum computing on crypto assets was reignited following Bitcoin’s sharp drop on October 10 last year. In a December post on X, Nic Carter argued that some Bitcoin developers were underestimating the quantum risk, a view rejected by prominent Bitcoin advocates like Adam Back.
*This is not investment advice.
