Quantum computing poses a theoretical threat to Bitcoin, but the risk remains distant and manageable, according to Wall Street broker Benchmark.

While quantum machines could eventually compromise certain cryptographic systems, Bitcoin has both the time and engineering path to evolve before that point, according to Benchmark analyst Mark Palmer, who has generally been bullish on the crypto industry as a whole.

"While recent headlines have amplified concern that quantum advances could undermine the protocol’s cryptographic foundations, our analysis suggests that the risk is real but distant, and that it has both the time and technical flexibility required to adapt well before the threat becomes acute," Palmer said in the Thursday report.

Quantum computing represents a looming cryptographic doomsday because it threatens to break the mathematical lock-and-key system that secures nearly every digital asset. While classical computers would take trillions of years to guess a Bitcoin private key, a sufficiently powerful quantum computer could derive that key from a public address in minutes, effectively allowing an attacker to unmask and drain wallets at will.

How it works

The protocol’s primary vulnerability lies not in its SHA-256 hashing algorithm, used in mining (mechanism for minting new Bitcoin), but in the elliptic curve digital signature algorithm (ECDSA) that secures users’ private keys, Palmer wrote. Once a public key is revealed, typically when bitcoin is spent, it becomes, in theory, susceptible to a quantum attack.

However, Palmer stressed that quantum computers capable of breaking ECDSA do not currently exist and are unlikely to emerge for at least another 10–20 years, if not longer.

Today’s quantum systems are small-scale, error-prone, and incapable of sustained computations at the scale required to threaten blockchain infrastructure, the analyst said. Moreover, only a small fraction of the total bitcoin supply, estimated at 1–2 million BTC, is held in addresses with exposed public keys. These include early Satoshi-era coins and reused wallets, but even these are not yet practically vulnerable.

Benchmark noted that spending bitcoin triggers a brief window in which the public key is broadcast to the network’s mempool, creating a theoretical opportunity for an attacker to intercept and redirect funds. Yet such a scenario would require an incredibly powerful, fault-tolerant quantum system and perfect execution.

The raging debate

While the threat is early, the quantum threat to Bitcoin has recently become a hot topic.

Leading bitcoin developers and advocates are pushing back (much like Palmer), arguing that machines capable of breaking Bitcoin’s cryptography do not exist today and are unlikely to for decades. Meanwhile, some investors and Wall Street analysts are weighing the real threat it poses to bitcoin.

Strategy (MSTR) executive chairman Michael Saylor has argued that quantum computing, while often sensationalized, threatens all forms of digital security, from banking to internet communications, not just Bitcoin.

On the flipside, Christopher Wood, Jefferies' global head of equity strategy, removed a 10% bitcoin allocation from his model portfolio, citing long-term security concerns posed by advances in quantum computing.

Regardless of the debate, the industry is taking preemptive steps for this potential long-term threat.

Coinbase’s formation of a Quantum Advisory Council, announced earlier this month, marks a turning point in how quantum risk is managed: moving it from a theoretical conversation into a structured institutional strategy.

Even Ethereum has taken the threat seriously and has elevated post-quantum security to a top strategic priority, forming a dedicated "Post Quantum" team.

No systemic risk

To Benchmark's Palmer, it's not all doom and gloom.

Even in worst-case scenarios where some early tokens are lost to a quantum attack, Palmer sees no systemic risk to the protocol’s integrity.

From an investor’s perspective, quantum computing is a long-term technical consideration, not an immediate threat or an investment thesis-breaker.

Near-term drivers for bitcoin’s price remain focused on liquidity conditions, regulatory developments, and institutional adoption, not speculative timelines around quantum supremacy, Palmer added.

Read more: Bitcoin’s quantum debate is resurfacing, and markets are starting to notice