The vulnerability of Bitcoin's cryptography to quantum computing: the market is already reacting

For years, the possibility that quantum computers could threaten Bitcoin was considered a distant future problem. But recent moves by institutional investors and new research suggest that this cryptography challenge is already influencing investment decisions in the present. Quantum risk is no longer just an academic debate but a factor reshaping how large institutions allocate their capital.

When investors change their minds: the quantum threat becomes real

Christopher Wood, a strategist at Jefferies, made a surprising decision: he reduced his Bitcoin exposure by 10% in his “Greed & Fear” model portfolio, reallocating those resources into physical gold and mining stocks. His justification points directly to concerns about cryptography: the threat that quantum computers could break the ECDSA algorithms protecting Bitcoin keys, casting doubt on its viability as a long-term store of value.

Wood’s move is not isolated. Bitcoin’s underperformance relative to gold this year—down 6.5%—reflects this reconfiguration of investor thinking. Meanwhile, the BTC/gold valuation ratio has fallen to 19.26 compared to previous weeks, demonstrating institutional caution regarding the future resilience of cryptography.

However, not all major institutions are retreating. Harvard increased its Bitcoin allocation by nearly 240%, and Morgan Stanley began recommending its wealth clients allocate up to 4% of their portfolios to crypto assets. Bank of America, for its part, allows investment ranges between 1% and 4%. This shows that institutional support is being redistributed based on different risk assessments, not disappearing entirely.

The vulnerabilities of current Bitcoin cryptography

Research published by Chaincode Labs in 2025 provides alarming data: between 20% and 50% of circulating Bitcoin addresses could be vulnerable to future quantum attacks due to public key reuse. This means approximately 6.26 million BTC—valued between 650 billion and 750 billion dollars—are at potential risk.

David Duong from Coinbase identifies the main attack vectors: quantum computers could compromise both ECDSA keys and attack SHA-256, the foundation of Bitcoin’s proof-of-work system. Vulnerable addresses specifically include legacy Pay-to-Public-Key scripts, certain multisig wallets, and some exposed Taproot configurations.

The increasing qubit capacity of quantum machines makes this scenario less theoretical every day. Advances shown by Google in 2025 mark milestones in reducing “quantum error,” bringing the reality of relevant quantum computers for cryptography (CRQC) closer.

Can Bitcoin adapt in time? The challenge of coordinating decentralized changes

Unlike centralized banking systems that can impose security updates by decree, Bitcoin faces a monumental challenge: coordinating cryptographic changes in a fully decentralized network without central authority, risk committee, or executive mandate. As Jamie Coutts noted on social media: “Bitcoin can technically be upgraded. But doing so requires slow and complicated coordination in a decentralized network. No one can just say: ‘We change now.’”

This decentralized structure, which is Bitcoin’s greatest strength against censorship, becomes its biggest weakness in the face of an existential threat that requires quick, coordinated response.

Protection strategies while the network decides

Not all is lost. The post-quantum cryptography standards finalized by NIST in 2024 provide a roadmap for future defenses. Address hygiene—avoiding public key reuse—and migrating funds to quantum-resistant addresses are immediate measures holders can implement today.

However, Charles Hoskinson of Cardano warns that rushing the adoption of post-quantum cryptography could seriously compromise protocol efficiency. DARPA’s Quantum Blockchain Initiative suggests that significant threats could materialize in the 2030s, but quantum capacity projection charts indicate this timeline could accelerate, especially if AI integration shortens quantum development times.

The clock is already ticking

The issue of quantum computing has ceased to be academic speculation. The weight of this risk is already visible in investors’ portfolios, in the recommendations of major banks, and in decisions to reduce or increase exposure. Bitcoin’s underperformance compared to gold not only reflects normal market cycles but also the growing pressure of a cryptography vulnerability that could be existential.

As Bitcoin’s decentralized network navigates the complexity of an upgrade to resist future quantum attacks, that “burden” on Bitcoin remains real and present, influencing the decisions of those betting on its future every day.