Jefferies global head of equity strategy Christopher Wood has removed a 10% Bitcoin allocation from his flagship “GREED & fear” model portfolio, citing long-term risks from advances in quantum computing that could potentially undermine the cryptocurrency’s cryptographic security. In its place, Wood reallocated 5% to physical gold bullion and 5% to gold-mining stocks, marking a significant pivot back to traditional safe-haven assets after years of embracing Bitcoin as digital gold.
The decision, detailed in the latest edition of Wood’s influential newsletter, reflects growing mainstream concerns about so-called cryptographically relevant quantum computers (CRQCs). These future machines could theoretically exploit algorithms like Shor’s to derive private keys from public ones far faster than classical computers, exposing certain Bitcoin addresses—particularly older or reused ones—to theft. Estimates suggest 20-50% of circulating supply could be vulnerable in a worst-case scenario, though Wood emphasized the threat remains distant rather than imminent.
While acknowledging no near-term price impact, Wood argued that quantum developments place Bitcoin’s store-of-value thesis on “less solid foundation” for long-term pension portfolios. This contrasts with his earlier enthusiasm, having added Bitcoin exposure in 2020 amid institutional adoption trends. The shift underscores a broader debate: Bitcoin proponents highlight ongoing research into post-quantum cryptography upgrades, while skeptics view the risk as an inherent flaw favoring tangible assets like gold.
Market reactions have been muted so far, with Bitcoin holding steady amid stronger institutional inflows elsewhere. Yet Wood’s move from a respected Wall Street voice adds weight to discussions about diversification in an evolving threat landscape.
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As quantum research accelerates globally, the episode highlights crypto’s maturation challenges: balancing innovation with resilience against emerging technologies that could reshape security paradigms for decades to come.
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