On January 16, 2026, at 8:00 AM UTC+8, Christopher Wood, the Global Equity Strategist at Jefferies, completely removed the 10% Bitcoin position from his model portfolio, drawing synchronized attention from traditional finance and the crypto market. Unlike previous adjustments triggered by severe price fluctuations or regulatory events, this time the official reason pointed directly to a seemingly distant yet highly destructive variable—quantum computing may weaken Bitcoin's cryptographic security. When a strategy head from a long-established Wall Street institution presses the "reset" button based on the erosion of underlying cryptographic assumptions, the issue transcends a mere reduction in a single asset; it becomes a larger suspense: why are institutions beginning to collectively reassess Bitcoin's long-term security and narrative as a store of value at this moment?
Wall Street Strategist Presses the Bitcoin Reset Button
In the context of traditional finance, Jefferies, as a well-established investment bank and brokerage, has a stable buy-side client base in the global equity and multi-asset allocation space, and its research and strategy reports are often regarded as important references by large asset managers, hedge funds, and family offices. Christopher Wood, as the Global Equity Strategist of the firm, has gradually formed a discourse power that has a demonstrative effect on certain institutional funds through flagship reports like "Greed & Fear," which provide a structured interpretation of emerging markets, multi-asset rotation, and macro risks. Therefore, when he gives a "reset" action to Bitcoin at the model portfolio level, its significance far exceeds that of a personal preference of a strategist; it resembles a decision template that can be cited and replicated.
According to a single source, Wood completely removed the original 10% Bitcoin allocation from the model portfolio, rather than simply reducing the position or hedging temporarily. This action conveys two symbolic signals: first, Bitcoin is no longer seen as an essential "long-term allocation block" in the current portfolio; second, the assumptions surrounding its long-term security have undergone a change significant enough to trigger a "binary choice" judgment. More critically, the impetus for this operation did not stem from a severe price pullback, a sudden change in trading liquidity, or short-term regulatory headwinds, but from doubts about the underlying technological security outlook—namely, if the cryptographic foundations supporting Bitcoin's operation have potential paths of erosion from quantum computing, then even if the current price is stable, continuing to hold may no longer align with the original intent of being a "defensive asset."
The Quantum Threat Emerges: Cracks in Bitcoin's Fortress
In the latest "Greed & Fear" report, Christopher Wood explicitly mentioned, "quantum computing may weaken Bitcoin's cryptographic security" (according to a single source). This statement has become the core logical anchor of this round of adjustments, yet it is also the only direct expression that can be publicly cited. Although the report did not provide specific technical routes, timelines, or probability estimates, it is sufficient to indicate that in his risk assessment framework, quantum computing is no longer just a sci-fi vision but a potential threat that needs to be accounted for in asset allocation.
On a layman's level, quantum computing is viewed as the "ultimate destroyer" of cryptocurrencies like Bitcoin primarily because it may rewrite the security boundaries of the existing public key encryption system. Bitcoin relies on elliptic curve cryptography and hash functions to ensure the one-way irreversible relationship between addresses and private keys, as well as the consensus basis for immutable transaction records. In the classical computing era, the cost of brute-forcing these cryptographic structures was prohibitively high, thus considered "effectively secure." However, with the support of specific algorithms (such as those used for factoring large numbers or computing discrete logarithms), quantum computers could theoretically attack these cryptographic assumptions at a fraction of the time and resource cost compared to classical computers, opening up possibilities for forging signatures, stealing assets, or even altering on-chain historical records.
For over a decade, Bitcoin has been packaged as "digital gold," relying on its unchangeable supply rules, the difficulty of altering on-chain history, and the technical guarantees that funds cannot be unilaterally confiscated. It has been regarded by many institutions as a store of value comparable to gold. However, once quantum computing is seen as having the potential to undermine these foundations, the narrative of "digital gold" will experience a reflexive impact—not because an attack has already occurred, but because the expectation of potential future attacks will inversely affect current valuations and willingness to allocate. When some institutions begin to question Bitcoin with "If at some point in the future the history of this chain can be rewritten, and addresses can be compromised, what exactly do I hold today?" the cracks in its fortress are no longer just hypotheses in technical forums but become discount factors that must be faced in asset pricing.
Technical Anxiety and Risk Pricing from the Institutional Perspective
For institutional investors who view assets as "stores of value," underlying technological security is not an abstract concept but a key variable that directly affects discount rates and holding durations. In traditional defensive assets like gold and government bonds, risk assessments focus more on sovereign credit, inflation expectations, and liquidity environments, with almost no uncertainty at the technical level. In contrast, assets like Bitcoin, which depend on cryptography and distributed networks, embed the answer to "whether it will safely exist in the future" in the form of technical assumptions within their valuations. Once these assumptions are challenged, even if they appear in academic papers, cutting-edge experiments, or strategy reports, they can create a shadow of "technological anxiety" in the minds of institutions.
From the perspective of regulation and custody, this anxiety is further amplified. Regulatory agencies, when assessing whether a certain asset is suitable as a qualified investment, focus on systemic risks and consumer protection, while custodians need to answer the question of "Can these keys and rights be safely stored in the foreseeable future?" Once quantum computing is proposed as a potential threat, custody solutions, key management processes, and security audit standards must all reassess their robustness in quantum scenarios. Even if quantum capabilities remain in the conceptual and early experimental stages, they will be viewed as a "forward risk item" in the discount rate, reflecting at the portfolio level as shorter holding periods, lower target weights, or even, as in Jefferies' case, choosing to exit before the technical path becomes clear.
However, there is significant uncertainty regarding the timeline and severity of the quantum threat. Research briefs clearly label the relevant time frames as "pending verification," meaning that whether it is a window of a few years or a longer evolutionary cycle, there is a lack of precise judgments that can be cautiously cited. The industry has divergent views on "when quantum will be sufficient to threaten the existing cryptographic system," but due to the lack of verifiable original texts and names, these divergences are difficult to present concretely. For institutions, this uncertainty itself is a risk: they cannot be sure that the quantum threat will not materialize within the investable cycle, nor can they be certain that it will quickly evolve into a real attack, leaving only two strategies—either assume the worst-case scenario and defend in advance, or temporarily ignore the risk and continue to hold. In Christopher Wood's framework, the former clearly prevails.
From Isolated Decisions to Possible Chain Reactions
On the surface, Jefferies' Bitcoin reset appears to be an independent judgment within an institution, but in reality, actions from sell-side research and strategy departments are often viewed as "replicable templates" on a larger scale. For traditional buy-side funds lacking deep research capabilities in the crypto space, sell-side institutions like Jefferies that have systematically discussed Bitcoin in their reports constitute a "risk signal" in themselves. Once strategy reports explicitly cite quantum risk as a reason for reducing or liquidating positions, this narrative can easily unfold along investment bank roadshows, client meetings, and secondary market interpretations, becoming a repeatedly referenced basis in discussions within other institutions.
In this dissemination mechanism, the potential for follow-on effects becomes conceivable. More institutions using model portfolios and tactical allocation frameworks may incorporate "quantum uncertainty" into their rationale for adjusting Bitcoin weights during quarterly or annual rebalancing: some may choose to reduce from double-digit proportions to single digits, while others may simply eliminate the asset to simplify compliance and communication costs. Such scenarios do not require a one-time large-scale sell-off, nor will they necessarily be immediately perceived by the market as a "collective exodus," but over a longer time dimension, they can exert continuous pressure on the total holdings and marginal increments of institutions.
Compared to traditional macro or regulatory headwind narratives, the position of "technological black swans" is somewhat unique. Macroeconomic recessions, liquidity tightening, or changes in tax policies have long been embedded in the risk assessment practices of various assets, with institutions having mature hedging tools and scenario analysis templates; regulatory crackdowns are often accompanied by traceable legislative processes and public discussions, which can be partially hedged through political analysis and lobbying activities. In contrast, quantum risk lies between the known and the unknown: there is neither a clear timeline for its realization nor a regulatory framework yet formed, but it theoretically possesses the ability to undermine the entire security premise of crypto assets. Because of this, it can easily become a resource for discourse in institutional internal games that leans towards "better safe than sorry"—in a phase of uncertainty but lacking falsification methods, voices advocating for reduced allocation or a wait-and-see approach often find it easier to persuade decision-making committees, which precisely provides greater diffusion space for actions like those of Jefferies.
Quantum Defense and Self-Rescue Window in the Bitcoin Ecosystem
In the face of the quantum shadow, the Bitcoin ecosystem is not without responses. In academic and developer communities, discussions around quantum-resistant cryptographic algorithms, alternative signature schemes, and the potential for protocol layer upgrades have been ongoing. Some researchers are exploring new public key systems to theoretically resist quantum algorithms' attacks on existing elliptic curve structures; others are attempting to assess how to achieve a gradual migration towards the quantum era without undermining network consensus and decentralization attributes from the perspective of on-chain governance and soft/hard forks. However, these explorations currently remain more at the directional and conceptual level, lacking a clear roadmap that can be easily understood, evaluated, and incorporated into risk control manuals by institutions.
For institutional funds that heavily rely on external trust and compliance endorsements, if the community's consensus and progress on quantum security routes remain opaque for an extended period, discounts and position contractions are almost unavoidable consequences. When managers cannot clearly explain to investment committees "What will happen to this chain if quantum capabilities reach a certain level?" or "What are our asset migration and protection plans?" the simplest decision is to reduce exposure or temporarily exit to observe. Information asymmetry and technological black boxes not only weaken Bitcoin's "store of value" narrative but also diminish its position in institutional asset allocation tables, as any long-term technological risk that cannot be explained and quantified will automatically translate into higher risk premium demands.
From a longer-term perspective, whether Bitcoin can regain institutional trust in the quantum era largely depends on two capabilities: the clarity of the technical route and the execution power of governance coordination. The former requires the developer community and relevant research entities to provide relatively communicable paths amid scientific uncertainty, such as evaluation criteria for quantum-resistant solutions, risk and benefit boundaries of potential upgrades, etc.; the latter tests whether this decentralized network can reach sufficiently fast and consistent decisions amid systemic threats while navigating multiple interests and ideological differences. If technological evolution and governance upgrades can be implemented before quantum capabilities truly possess disruptive potential, Bitcoin may have the opportunity to turn the current quantum anxiety into a positive proof of "self-repair capability"; conversely, if there is a persistent lack of clear direction and collective action during critical windows, the retreat of institutions from its allocation may become difficult to reverse.
The Quantum Shadow Lingers: Institutions and Bitcoin's Long-Term Bet
Returning to Jefferies' decision to completely remove Bitcoin from its portfolio, it reflects a highly sensitive and even defensive institutional stance towards long-term technological security. Christopher Wood did not make this adjustment in the context of significant price fluctuations or sudden regulatory shifts; instead, he chose to completely eliminate this position from the model portfolio while the quantum threat still remains in the theoretical and cutting-edge experimental stage. This approach essentially acknowledges that for an asset viewed as a "store of value," the mere possibility of questioning the underlying cryptographic assumptions is sufficient to constitute a structural risk that requires active management.
However, when quantum computing will develop to a level that poses a substantial threat to Bitcoin's security, its timeline and actual destructive power are currently in a "pending verification" state. Existing public information is insufficient to support the optimistic claim that "there is no need for concern within the foreseeable cycle," nor does it allow pessimists to provide an accurate countdown. This ambiguous interval causes market sentiment to oscillate between "fear and neglect": some funds choose to defend early like Jefferies, while others continue to bet on Bitcoin as a long-term value of a digital scarce asset, believing that the technical community will complete the necessary evolution before the risks truly approach.
In the future, whether Bitcoin can navigate this quantum test will largely determine its final position in institutional asset allocation. If, in the coming years, the Bitcoin ecosystem can present a clear, verifiable, and governance-feasible quantum defense roadmap, it may still have the opportunity to maintain or even strengthen its status as "digital gold," turning the current quantum anxiety into a necessary risk education and technological upgrade opportunity; however, if the quantum issue remains unresolved for an extended period, and defensive reductions like Jefferies' continue to accumulate, Bitcoin is likely to regress in the institutional perspective from a "must-have asset" to a "highly volatile, technically fragile trading target." Before the quantum shadow dissipates, this long-term bet on security assumptions, technological evolution, and trust reconstruction has only just begun.
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