Is Quantum Moving Faster Than Markets Expected? Bitcoin Rebalance Suggests Changed in Quantum Computing Risk Perception

Insider Brief

• Jefferies removed Bitcoin from a key Asia-focused portfolio, citing the long-term risk that advances in quantum computing could eventually undermine the cryptography securing the network.
• The decision reflects a broader institutional shift toward evaluating digital assets based on long-horizon technological resilience rather than near-term price or regulatory factors.
• While experts disagree on the timeline and severity of quantum threats, the move elevates post-quantum security from a theoretical concern to an active consideration in portfolio construction.
• Photo by madartzgraphics on Pixabay

Jefferies has removed Bitcoin from a key Asia-focused portfolio, according to several news sources, citing the long-term risk that advances in quantum computing could undermine the cryptography that secures the cryptocurrency.

For the emerging quantum industry, the move by Jeffries, a respected global investment bank that provides capital markets, advisory, trading and research services primarily to institutional investors, suggests that institutional investors are recalibrating the progress of quantum tech.

According to reporting by Bitcoin World, the decision was made by Christopher Wood, global head of equity strategy at Jefferies, who for years had argued that Bitcoin belonged in the firm’s Asia ex-Japan relative-return portfolio as a hedge against monetary debasement. The latest portfolio update marks a reversal not driven by price swings or regulatory pressure, but by what Wood views as an existential technological threat.

Bitcoin World reported that Jefferies’ analysis centers on the possibility that sufficiently advanced quantum computers could one day break the cryptographic systems that underpin Bitcoin’s security. If that were to occur, the firm argues, Bitcoin’s appeal as a long-term store of value for institutional clients would be fundamentally weakened.

The decision comes amid a broader recalibration by asset managers in early 2025, as institutions subject digital assets to deeper scrutiny around long-term viability rather than short-term market cycles. Now Jefferies move offers a concrete example of how quantum computing — often dismissed as a far-off technology in academic circles — is beginning to influence real-world investment decisions.

Quantum Computing and Cryptographic Risk

Quantum computers differ from classical machines by using quantum bits, or qubits, which theoretically perform some calculations much more efficiently than classical methods. For example, in theory, they could solve certain mathematical problems far faster than conventional computers. Bitcoin relies on two core cryptographic tools: the Elliptic Curve Digital Signature Algorithm, or ECDSA, which secures wallets and authorizes transactions, and the SHA-256 hash function, which underpins mining and network integrity.

Researchers have shown that a powerful enough quantum computer running Shor’s algorithm could derive a private key from a public key, breaking ECDSA. A separate quantum technique, Grover’s algorithm, could weaken SHA-256 by speeding up brute-force attacks, though not rendering it useless outright. The timing of when a “cryptographically relevant” quantum computer might emerge is uncertain, with estimates ranging from years to several decades.

Thar timing isn’t the central issue for Jeffries, according to Bitcoin World. Even if the threat is distant, the firm appears unwilling to maintain a strategic allocation when the downside scenario involves a complete erosion of security.

Diverging Expert Views

Not all experts agree with Jefferies’ conclusion, though.

“Portfolio managers have a fiduciary duty to consider long-tail risks,” Dr. Anya Petrova, a fintech researcher at the Cambridge Centre for Alternative Finance, told Bitcoin World. “While the quantum threat may be years away, its potential impact is catastrophic. Therefore, some institutions may choose to de-risk preemptively.”

Others said that the risk is being overstated.

“To frame this as an insurmountable problem is misleading,” Marcus Tan, lead developer for a Bitcoin scalability protocol, said, as reported by Bitcoin World. “Several Bitcoin Improvement Proposals (BIPs) related to post-quantum signatures are in active discussion. The network has a proven history of adapting to existential challenges.”

Cryptographers broadly agree that post-quantum cryptography — new algorithms designed to resist both classical and quantum attacks — is advancing. The challenge for Bitcoin, however, may not be purely technical, but organizational. Transitioning a decentralized network to new cryptographic standards would require broad consensus, careful sequencing, and years of coordination.

The Jefferies’ decision seems to send a signal beyond just a single portfolio. In the near term, other conservative institutions may reduce direct Bitcoin exposure or favor indirect exposure through equities and managed products.

At the same time, the move increases pressure on blockchain developers to articulate credible plans for post-quantum resilience. Projects that can demonstrate a realistic transition path may find it easier to attract institutional capital.