Top Wall Street Strategist Drops Bitcoin From Portfolio Over Quantum Fears

• Christopher Wood cut Bitcoin exposure to zero, reallocating funds to gold assets.
• The move was driven by long-term security concerns, not Bitcoin’s price performance.
• Wood warned that quantum computing could weaken Bitcoin’s cryptography over time.

Christopher Wood, global head of equity strategy at Jefferies, has removed Bitcoin from his long-running “Greed & Fear” model portfolio, citing concerns about the long-term impact of quantum computing on the cryptocurrency’s security.

According to the latest edition of his newsletter, Wood previously held a 10% allocation to Bitcoin in the portfolio. He has now reduced that exposure to zero and reallocated the funds to gold-related assets.

Shift From Bitcoin to Gold

According to Wood, the 10% allocation was split evenly, with 5% moved into physical gold and 5% into gold-mining equities. Following the change, the portfolio now holds about 45% in physical gold and 25% in gold-mining stocks.

This move comes despite Bitcoin’s strong past performance. Bitcoin has risen more than 300% since 2020, but Wood said his decision was driven by concerns about long-term security rather than price action or regulation.

Why Quantum Computing Matters

Bitcoin relies on cryptography to secure wallets and approve transactions. Today’s computers cannot realistically break this system. However, Wood warned that future advances in quantum computing could weaken current encryption methods by making it easier to derive private keys from public data.

Wood said the possibility of cryptographically relevant quantum computers emerging within the next decade or two creates uncertainty for investors with long time horizons, such as pension funds and sovereign wealth managers.

For these investors, even a low-probability risk to the core security of an asset can be enough to challenge its role as a long-term store of value.

Developers Split Over Quantum Computing Risk to Bitcoin

Nic Carter, a partner at Castle Island Ventures, said in a December post on X that many Bitcoin developers are not taking the potential risks from quantum computing seriously.

Carter said there is a clear gap between investors and developers, noting that capital is worried about the issue and looking for solutions, while developers are largely dismissing the risk. He added that this disagreement is already affecting market confidence.

Debate Over Timing and Risk

Not all experts agree on the urgency of the threat. Some developers and researchers argue that quantum risks remain decades away and that Bitcoin could be upgraded to quantum-resistant cryptography well before any real danger appears.

They also said that quantum computing would pose challenges to many digital systems, including banking, government networks, and the broader internet, not just cryptocurrencies.

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