Famous strategist "abandoned" Bitcoin, citing concerns that "quantum computing will be realized soon"

Christopher Wood, the global equity strategist at Jefferies, has completely removed Bitcoin from his portfolio due to 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 like 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 this decision was made out of concern that the advent of quantum computing could shake the foundations of Bitcoin, with the technology potentially achieving breakthroughs in the coming years rather than in over a decade.

Quantum computers could theoretically break Bitcoin's encryption algorithms, reverse-engineering to derive the private keys used to authorize transfers. Wood stated:

It would undermine the concept of Bitcoin as a store of value, thereby undermining its status 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 massive stimulus measures and concerns about the depreciation of the dollar intensified, and he increased his holdings to 10% in 2021.

Shifting from Cryptocurrency 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 has been rebutted by prominent Bitcoin advocates, including Adam Back from Blockstream.

Wood believes that this debate itself is quite telling. Some developers downplay the risks, while others in the industry feel that the developer community has failed to confront this threat, highlighting the uncertainty within the cryptocurrency community in addressing emerging technological challenges.

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

The Bitcoin community is increasingly concerned that quantum computing could achieve breakthroughs in just a few years rather than ten years or longer.

Wood believes that the long-term issues raised by quantum computing are "only a long-term positive for gold." He described gold as a historically tested hedge in an increasingly uncertain geopolitical environment