Well-known strategist "abandoned" Bitcoin, reasoning that "concerns about quantum computing will soon be realized"

Christopher Wood, the global head of equity strategy at Jefferies, has completely removed Bitcoin from his investment portfolio, citing concerns that the rapid development of quantum computing could undermine this cryptocurrency.

On January 16, Christopher Wood stated in an analysis column that advancements in quantum computing would weaken the logic of Bitcoin as a "reliable store of value," especially for long-term investors such as pension funds.

He liquidated his 10% Bitcoin position in his portfolio model, reallocating 5% to physical gold and 5% to gold mining stocks.

He explained that the reason for this move was the fear that the advent of quantum computing would shake the foundations of Bitcoin, as this technology could achieve breakthroughs in the coming years rather than in over a decade.

Quantum computers theoretically could crack Bitcoin's encryption algorithms, reverse-engineering to derive the private keys used for authorizing transactions. Wood stated:

It would undermine the concept of Bitcoin as a store of value, thereby destroying its position as a digital alternative to gold.

Wood was an early institutional supporter of Bitcoin, incorporating it into his portfolio in December 2020 during the pandemic when countries released large-scale stimulus measures and concerns about the depreciation of the dollar intensified, increasing his holdings to 10% in 2021.

Shifting from cryptocurrencies to traditional safe-haven assets

In December last year, Nic Carter, a partner at Castle Island Ventures, stated on social media that Bitcoin developers "deny" the risks of quantum computing, a viewpoint that was countered by prominent Bitcoin advocates, including Blockstream's Adam Back.

Wood believes this debate highlights the issue itself. Some developers downplay the risks, while others in the industry believe that the developer community has failed to confront this threat, underscoring the uncertainty within the cryptocurrency community when addressing emerging technological challenges.

The Bitcoin network is based on cryptography to protect tokens and verify transactions. With current computer technology, cracking this cryptography is virtually impossible. However, quantum computers could change this situation, Wood wrote in his column:

The Bitcoin community is increasingly concerned that quantum computing may be achievable in just a few years rather than ten or more.