Bitcoin May Be Trading Below Adjusted Value, Crypto Expert Warns

Bitcoin should already be trading at a discount because of the growing threat from quantum computing, according to Charles Edwards, founder of Capriole Fund.

In a February 20 report, Edwards argues that markets have quietly begun pricing in what he calls an “existential” risk – one that could materialize within the next decade.

His warning is blunt: if the network does not migrate to quantum-resistant cryptography in time, up to 20–30% of Bitcoin’s supply could eventually be exposed to theft and forced liquidation once so-called “Q-Day” arrives.

The 20% Quantum Discount

Edwards introduces the concept of a “Quantum Discount Factor” – the percentage by which Bitcoin’s fair value should be reduced to account for the probability that a cryptographically relevant quantum computer emerges before the network upgrades.

Based on his probability model, there is roughly a 20% chance that Q-Day occurs by 2028. Since Bitcoin would likely need about two years to fully migrate to quantum-resistant code, he argues that rational investors should already be discounting fair value by around 20%.

If progress stalls, that discount could widen sharply:

• 40% by 2027
• 60% by 2028
• As high as 75% by 2029

In other words, the longer the protocol delays meaningful upgrades, the heavier the valuation penalty becomes.

Why 2025 Was So Strange for Bitcoin

Edwards points to 2025 as a major anomaly. Historically, post-halving years have delivered strong gains for Bitcoin due to supply tightening. Yet 2025 marked the first negative post-halving year in the asset’s history.

That underperformance came despite:

• Global money supply expanding by over 10%
• Gold surging more than 50%
• U.S. pro-Bitcoin policy tailwinds
• Bitcoin’s annual inflation rate falling below gold’s

Under similar macro conditions in the past, Bitcoin typically outperformed. Instead, it lagged both gold and equities – a divergence Edwards attributes to markets entering what he calls the “Quantum Event Horizon,” where the time required to upgrade the network is no longer comfortably ahead of the quantum threat timeline.

How Real Is the Threat?

Bitcoin currently relies on elliptic curve cryptography (ECC) to secure private keys. Classical computers would need billions of years to brute-force such encryption. Quantum machines, however, could run Shor’s algorithm and potentially crack exposed public keys far faster.

Industry estimates suggest around 2,300 logical qubits – roughly 100,000 physical qubits – could be enough to break Bitcoin’s cryptography. Several leading quantum computing firms are targeting those levels within 2–5 years.

Quantum systems are already deployed on major cloud platforms and are advancing faster than Moore’s Law, with qubit counts doubling roughly every 18 months.

Edwards’ aggregated forecasts suggest:

~60% probability of Q-Day by 2030

~80% probability by 2031

All major expert projections cluster within the next nine years.

Two Critical Problems Bitcoin Must Solve

Edwards outlines two urgent challenges:

1. Migrating active users (roughly 70% of supply) to quantum-resistant wallets via a protocol upgrade.
2. Addressing 20–30% of coins with exposed public keys, including early P2PK addresses and lost coins, which could be vulnerable to mass theft and liquidation.

One controversial proposal involves a “dead man’s switch” that would freeze unmigrated coins after a set period. While potentially effective at preserving network integrity, such a move would ignite philosophical debates over property rights and Bitcoin’s “not your keys, not your coins” ethos.

Without addressing both issues, Edwards argues, Bitcoin’s value could theoretically collapse to zero in a worst-case scenario following Q-Day.

Is Bitcoin Undervalued Despite the Risk?

Using his long-standing “Energy Value” model, Edwards estimates Bitcoin’s fair value at around $120,000. After applying a 20% quantum discount, that figure drops to approximately $96,000.

With Bitcoin trading in the $60,000 range in February 2026, he contends the asset is still roughly 30% undervalued – assuming the network ultimately resolves the quantum threat within the next two to three years.

In that scenario, a credible roadmap toward quantum-resistant signatures could trigger a sharp repricing upward as the discount factor compresses.

Institutions Already Reacting

Edwards notes that several major allocators have publicly raised quantum concerns over the past year. Some asset managers have reduced Bitcoin exposure or capped allocations pending clarity on quantum resilience.

He maintains that this repositioning explains Bitcoin’s relative weakness versus gold and equities since mid-2025, despite supportive macro conditions.

The Bottom Line

Quantum computing is no longer a distant theoretical risk, according to Edwards – it is a timeline-driven probability that markets have started to incorporate.

The key variable now is speed.

If Bitcoin developers move decisively in 2026 toward quantum-resistant code and credible migration paths, the current discount could shrink quickly. If not, Edwards warns that the valuation penalty will grow exponentially as Q-Day approaches.

For Bitcoin, adaptability may determine whether it remains the “hardest money” in a changing technological landscape – or becomes the first major financial system tested by the quantum era.

The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.

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