It is considered that advances in quantum computing technology have begun to play a significant role in the relative value of Bitcoin against gold. Willy Woo, known for his cryptocurrency analysis, states that market dynamics have changed noticeably recently.
Market Reaction to Quantum Risk
Woo points out that Bitcoin’s superior performance against gold, which has lasted for about twelve years, has deteriorated. According to the analyst, one of the important reasons for this is that the long-term risks of quantum computers on the security of crypto assets have become more prominent. This development has created a new type of uncertainty in the markets in terms of Bitcoin’s valuation.
Concerns About Bitcoin’s Security Model
Bitcoin’s current security infrastructure works through elliptic curve encryption. However, if sufficiently powerful quantum computers are developed in the future, it is thought that the assets in the addresses may be compromised by obtaining private keys from public keys. With today’s technology, such a threat does not yet exist, but the possibility raises new questions about the balance of supply and value of Bitcoin over the long term.
According to Woo, there are approximately four million units considered “lost” in the Bitcoin ecosystem. With the development of quantum computers, the risk of these lost assets coming back into circulation can put pressure on the current supply. By comparison, institutional companies and spot Bitcoin ETFs, primarily MicroStrategy, have accumulated approximately 2.8 million units of Bitcoin in total in recent years. If the four million units assumed to be lost are returned, there may be a possibility of a supply increase even beyond this amount.
“The market has begun to price in advance the possibility of the return of these lost assets. This process will be completed when the quantum threat is eliminated. This risk will be effective in Bitcoin pricing for the next five to fifteen years.”
The analyst also states that quantum-resistant signing systems can be used as a method of preserving Bitcoin before possible quantum attacks begin. However, even if such a technical update occurs, the status of old lost assets may not be directly resolved at the protocol level.
“In the current situation, it is unlikely that a protocol change will be made that will prevent the return of these lost assets. As the financial cycle in which Bitcoin is needed most approaches its end, large investors and governments are turning to gold; therefore, the value of gold may rise faster than Bitcoin.”
How Do Institutional Investors Approach Quantum Risk?
It is stated that the quantum threat is not just a technical discussion, but directly affects market behavior. According to Charles Edwards, founder of Capriole Investments, the increasing talk of quantum risk has become a decisive factor in the recent declines in Bitcoin price. Edwards states that a decline in the price of Bitcoin was observed, especially during periods when public interest in quantum risk peaked.
Jefferies’ strategist Christopher Wood also reduced the amount of Bitcoin in his portfolio due to quantum concerns and turned to gold and mining stocks. Such moves suggest that quantum computers are viewed by institutional investors as a serious market risk rather than a remote possibility.
