Jefferies’ Wood Cuts 10% Bitcoin Exposure Amid Quantum Computing Concerns

The long-term investment case for bitcoin is facing renewed scrutiny as institutional strategists begin to grapple with a question once confined to academic debate: what happens if quantum computing advances faster than expected?

That question is now influencing portfolio construction. Jefferies strategist Christopher Wood has removed a 10% bitcoin allocation from his model portfolio this week, redirecting the capital evenly into physical gold bullion and gold mining equities — a move that underscores growing unease around bitcoin’s durability as a store of value in a post-quantum world.

The portfolio adjustment follows the release of research suggesting that between 4 million and 10 million BTC — roughly 20% to 50% of the circulating supply — could be exposed to future quantum computing threats.

A symbolic shift in institutional positioning

Quick Take

Christopher Wood, Jefferies’ global head of equity strategy, has dropped bitcoin entirely from the firm’s “GREED & fear” model portfolio, citing rising concerns around quantum computing risks. The move eliminates the portfolio’s 10% bitcoin position, replacing it with two new 5% allocations to physical gold and gold mining stocks, according to a note shared Thursday with The Block.

While the reallocation does not signal an imminent collapse scenario, it represents a notable recalibration from one of bitcoin’s earlier institutional champions. Wood pointed to an increasingly active — albeit still theoretical — debate over quantum computing’s potential to undermine Bitcoin’s cryptographic foundations, describing the issue as an “existential” risk to the asset’s long-term role as a store of value.

“While GREED & fear does not believe that the quantum issue is about to hit the bitcoin price dramatically in the near term, the store of value concept is clearly on less solid foundation from the standpoint of a long-term pension portfolio,” Wood wrote.

That framing is key. The decision was less about short-term price volatility and more about fiduciary responsibility across multi-decade horizons — the same timeframes that underpin pension funds, sovereign wealth vehicles, and insurance balance sheets.

From digital gold to renewed skepticism

Wood was among the first institutional strategists to incorporate bitcoin into a diversified model portfolio, adding exposure during the pandemic-era stimulus cycle once institutional-grade custody solutions had matured. At the time, the investment thesis emphasized Bitcoin’s fixed supply schedule, with the final coins projected to be mined around the year 2140.

Bitcoin’s appeal to macro investors rested on its scarcity, decentralization, and perceived insulation from monetary debasement — positioning it as a digital analogue to gold. But that narrative, Wood suggests, may rest on cryptographic assumptions that are no longer guaranteed to hold indefinitely.

That assumption is now being reexamined. Referencing a May 2025 paper by Chaincode Labs researchers Anthony Milton and Clara Shikhelman, Wood highlighted estimates that between 4 million and 10 million BTC — or 20% to 50% of coins in circulation — could be susceptible to quantum-enabled private key extraction. The study identified exchange-held and institutional wallets as particularly vulnerable due to address reuse practices.

If realized, such vulnerabilities could undermine confidence not only in bitcoin’s security model, but also in the permanence of its fixed supply — a cornerstone of its valuation framework.

Industry scrutiny of quantum computing timelines grows

The portfolio shift comes as attention across the crypto industry increasingly turns to quantum preparedness. While practical quantum attacks remain speculative, the pace of progress is accelerating.

Microsoft’s February 2025 unveiling of its Majorana 1 quantum chip was widely viewed as a milestone that could accelerate the arrival of “Q-Day” — the point at which existing encryption standards become vulnerable. For crypto networks built on elliptic curve cryptography, the implications are profound.

In a Jan. 6 LinkedIn post, Coinbase Global’s head of investment research, David Duong, cautioned that as much as 33% of bitcoin’s supply could face elevated risk from quantum attacks, particularly coins held in reused addresses or early “Satoshi-era” wallets. Duong also noted growing institutional awareness, citing BlackRock’s decision to disclose quantum computing risks in a revised prospectus for its iShares Bitcoin Trust ETF in May 2025.

The disclosure marked a subtle but important shift: quantum risk is no longer an abstract footnote, but a formally acknowledged factor in regulated investment products.

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Capital, code, and custody respond

In response to these concerns, several initiatives are raising capital to address quantum security challenges. This week, Project Eleven announced a $20 million Series A funding round at a $120 million valuation, led by Castle Island Ventures, aimed at developing tools to harden crypto networks against quantum threats.

The funding highlights a broader trend: investors are increasingly willing to back infrastructure designed not for today’s threats, but for those expected decades into the future.

Even sovereign bitcoin holders have taken action. Last August, El Salvador distributed its bitcoin reserves across 14 separate addresses, citing enhanced security measures linked to emerging quantum risks — a reminder that even nation-states are factoring post-quantum considerations into their custody strategies.

Beyond Bitcoin, Ethereum co-founder Vitalik Buterin has outlined what he views as the necessary conditions for a quantum-resistant Ethereum network, including the ability to withstand quantum attacks over a century-long horizon. Buterin has argued that quantum resilience is essential for any blockchain protocol aspiring to operate sustainably without ongoing developer intervention.

A long-term question for digital assets

For now, quantum computing remains a future risk rather than an immediate threat. But Wood’s decision suggests that, for conservative allocators, even distant tail risks can reshape portfolios when the asset in question is meant to serve as a generational store of value.

The reallocation back toward gold — an asset with millennia of precedent — underscores a broader theme emerging across institutional crypto adoption: technological innovation may be rapid, but trust at scale is built slowly, and easily unsettled by uncertainty.