Quantum Leap or Quantum Collapse? Investment Banking Giant Abandons Bitcoin

For years, Bitcoin has been touted as an impenetrable fortress of digital security. However, a surprising development from the world of advanced computing has challenged this narrative in ways few anticipated.

Christopher Wood, the Global Head of Equity Strategy at Jefferies—a prominent global investment bank—has made waves by completely eliminating Bitcoin from his widely-followed investment recommendations. His reasoning? The emerging threat posed by quantum computing technology.

From Digital Asset to Quantum Vulnerability

Christopher Wood emerged as one of Bitcoin’s early institutional advocates. During the tail end of 2020, as pandemic-related government stimulus raised inflation concerns, Wood incorporated Bitcoin into his model portfolio, eventually expanding its allocation to 10 percent.

However, in his most recent edition of the influential GREED & Fear newsletter, Wood has executed a complete withdrawal from Bitcoin. His concern centers on quantum technology advances that could potentially undermine Bitcoin’s fundamental value proposition as a reliable long-term asset.

The Security Dilemma: When Mathematics Meets Physics

Bitcoin’s security infrastructure depends on the SHA-256 hashing algorithm alongside public-key cryptography. While these systems remain impervious to today’s most advanced supercomputers, quantum computers operate under entirely different computational principles.

• The Quantum Advantage: Quantum bits, or qubits, can simultaneously exist in multiple states—unlike traditional binary bits that must be either zero or one. This characteristic enables quantum systems to execute certain mathematical operations—such as deriving private encryption keys from public ones—at unprecedented speeds that could render current encryption methods obsolete.
• Shifting Timeline Concerns: While many previously believed this threat remained decades away, Wood notes increasing anxiety that practical quantum attacks could emerge within just a few years rather than ten or more.
• The “Harvest Now, Decrypt Later” Scenario: Sophisticated adversaries could already be collecting encrypted data, waiting patiently for quantum hardware to mature enough to unlock it. Security researchers have identified approximately 6.5 million BTC—roughly 20 to 50 percent of circulating supply—held in older wallet formats particularly vulnerable to these long-range quantum attacks.

The Catastrophic Scenario

Should quantum computers successfully compromise Bitcoin’s encryption without warning, the consequences would devastate the cryptocurrency market:

1. Unauthorized Access: Attackers could derive private keys from publicly visible addresses, enabling them to drain digital wallets.
2. Evaporating Confidence: The foundational “store of value” argument would collapse instantly.
3. Market Panic: A rush toward the exits could potentially drive Bitcoin’s valuation toward zero.

According to research from Chaincode Labs, between 4 million and 10 million BTC could become vulnerable under specific quantum attack conditions, representing a substantial portion of the total Bitcoin supply.

Redirecting Capital to Traditional Safe Havens

Wood hasn’t simply moved to cash positions. Instead, he’s returning to time-tested assets with proven track records spanning millennia. His new allocation splits the former 10 percent Bitcoin position into:

• 5% Physical Gold
• 5% Gold Mining Equities

With gold recently achieving record highs exceeding $4,600 per ounce in early 2026, Wood’s pivot reflects a preference for assets with thousands of years of demonstrated durability—assets whose existence doesn’t hinge on the integrity of specific mathematical algorithms.

Is This Bitcoin’s Final Chapter?

Not everyone shares Wood’s dire assessment. Adam Back, CEO of Blockstream, along with other blockchain developers, contends that the network can implement “quantum-resistant” upgrades. Through the deployment of new cryptographic signature schemes, Bitcoin could theoretically protect itself against quantum threats.

Nevertheless, for long-term, pension-style investors like Wood, even the possibility of structural failure presents sufficient cause for reallocation. In this emerging confrontation between digital scarcity and quantum processing capabilities, the “Greed & Fear” strategist has chosen the security of Earth’s most precious metal.

The Broader Institutional Response

Jefferies’ decision represents more than an isolated portfolio adjustment. The move signals a potential shift in how conservative institutions evaluate cryptocurrency holdings:

• Increased Scrutiny: Other risk-averse institutions may follow suit by reducing direct Bitcoin exposure or preferring indirect exposure through equities and managed products.
• Development Pressure: Blockchain developers face mounting pressure to articulate credible roadmaps for post-quantum resilience.
• Competitive Advantage: Projects capable of demonstrating realistic transition paths toward quantum resistance may find it easier to attract institutional capital.

While quantum computing threats have been theoretically discussed for years, accelerating development timelines have transformed the conversation from abstract speculation to active preparation among institutional investors.

What This Means for Crypto’s Future

Wood’s decision underscores the critical importance of considering long-tail technological risks when evaluating digital assets for extended-duration institutional portfolios. For entities such as pension funds requiring stable, secure value stores over prolonged periods, the mere existence of a potential structural vulnerability may outweigh Bitcoin’s other investment merits.

The path forward involves transitioning to quantum-resistant algorithms—a process that could require five to ten years of development and implementation across Bitcoin’s decentralized network. This migration would necessitate unprecedented consensus among miners, developers, and users.

As 2026 unfolds, Bitcoin’s narrative increasingly intertwines technological resilience with market psychology. While quantum threats may not materialize immediately, their looming presence is already reshaping investment strategies from Wall Street trading desks to decentralized development forums. Whether quantum computing becomes a catalyst for innovation or an insurmountable obstacle, it highlights the necessity for forward-thinking adaptation in an era of rapid technological transformation.

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Disclaimer: This analysis is based on publicly available information and market reports. Cryptocurrency investments carry substantial risk, and investors should conduct thorough research and consult financial advisors before making investment decisions.

References

1. Bloomberg. (2026, January 16). “Mr. Greed and Fear Drops Bitcoin (BTC) for Gold on Quantum Threat.” Available at: https://www.bloomberg.com/news/articles/2026-01-16/mr-greed-and-fear-drops-bitcoin-btc-for-gold-on-quantum-threat
2. The Block. (2026). “Jefferies’ Wood Drops Bitcoin Allocation Over Quantum Computing Fears.” Available at: https://www.theblock.co/post/385951/jefferies-wood-drops-bitcoin-allocation-over-quantum-computing-fears
3. CryptoNews. (2026). “Jefferies’ Wood Ditches Bitcoin, Warning Quantum Computing Could Break It.” Available at: https://cryptonews.com/news/jefferies-wood-ditches-bitcoin-warning-quantum-computing-could-break-it/
4. Bitcoin Magazine. (2026). “Jefferies Drops Bitcoin Over Quantum Computing Concerns.” Available at: https://bitcoinmagazine.com/news/jefferies-bitcoin-over-quantum-computing
5. CryptoSlate. (2026). “Bitcoin’s ‘Quantum Death Sentence’ Is Causing a Wall Street Rift, But the Fix Is Already Hidden in the Code.” Available at: https://cryptoslate.com/bitcoins-quantum-death-sentence-is-causing-a-wall-street-rift-but-the-fix-is-already-hidden-in-the-code/
6. ScanX Trade. (2026). “Jefferies’ Christopher Wood Exits Bitcoin, Returns to Gold Amid Quantum Computing Concerns.” Available at: https://scanx.trade/stock-market-news/global/jefferies-christopher-wood-exits-bitcoin-returns-to-gold-amid-quantum-computing-concerns/30101741
7. WebProNews. (2026). “Quantum Computing Threatens Bitcoin: Analyst Shifts to Gold in 2026.” Available at: https://www.webpronews.com/quantum-computing-threatens-bitcoin-analyst-shifts-to-gold-in-2026/
8. The Quantum Insider. (2026, January 16). “Is Quantum Moving Faster Than Markets Expected? Bitcoin Rebalance Suggests Changed in Quantum Computing Risk Perception.” Available at: https://thequantuminsider.com/2026/01/16/is-quantum-moving-faster-than-markets-expected-bitcoin-rebalance-suggests-changed-in-quantum-computing-risk-perception/
9. CryptoBriefing. (2026). “Top Wall Street Strategist Exits Bitcoin Over Quantum Computing Threat.” Available at: https://cryptobriefing.com/top-wall-street-strategist-exits-bitcoin-quantum-computing-threat/
10. CoinDesk. (2026, January 16). “Jefferies Strategist Christopher Wood Swaps Bitcoin for Gold on Quantum Computing Concern.” Available at: https://www.coindesk.com/markets/2026/01/16/jefferies-strategist-christopher-wood-swaps-bitcoin-for-gold-on-quantum-computing-concern
11. Yahoo Finance. (2026, January 18). “Fear that Quantum Computing is on the Cusp of Cracking Cryptocurrency’s Encryption Spurs a Global Investment Firm to Remove Bitcoin from Recommendations.” Available at: https://finance.yahoo.com/news/fear-quantum-computing-cusp-cracking-122000315.html

Additional Reading

• Jefferies GREED & Fear Newsletter (January 2026 Edition)
• Chaincode Labs Research on Bitcoin Quantum Vulnerability
• Blockstream Official Statements on Quantum-Resistant Bitcoin Development
• Tom’s Hardware: “Quantum Computer Development Could Put Bitcoin Security at Risk by the 2030s” (2022)