Chris Wood cites “existential” threat to Bitcoin’s cryptographic foundation in rare portfolio reversal
In a move that sent ripples through institutional crypto circles, veteran Jefferies strategist Chris Wood has completely eliminated Bitcoin from his widely-followed long-term model portfolio, marking a significant reversal for one of Wall Street’s most prominent advocates of the digital asset. The decision, which reallocates a full 10% portfolio weighting away from Bitcoin, represents one of the most notable institutional downgrades of the cryptocurrency in recent memory.
Wood’s dramatic shift stems from growing concerns about quantum computing’s potential to undermine Bitcoin’s fundamental security architecture. Rather than positioning for an immediate price collapse, the strategist’s move reflects deeper anxieties about Bitcoin’s viability as a long-duration store of value, particularly for pension-style allocations that require decades of reliability.
The Quantum Computing Timeline Accelerates
The catalyst for Wood’s decision appears to be a compression in the perceived timeline for cryptographically relevant quantum computers (CRQCs). Where the threat was once viewed as a distant concern potentially a decade or more away, Wood now sees credible risks emerging within “a few years.” This acceleration has transformed quantum computing from an abstract theoretical discussion into a concrete risk that institutional allocators are being forced to evaluate.
“GREED & fear is no pure mathematician,” Wood wrote in his January 15 note, referencing his popular research publication. He described being drawn into technical discussions about “elliptic curves” as the quantum threat has gained prominence among asset managers. The strategist’s concern centers on Bitcoin’s cryptographic foundation, which relies on the computational infeasibility of deriving private keys from public keys—a protection that quantum computers could theoretically break.
Wood outlined the stark nature of the threat: what currently takes classical computers an effectively infinite amount of time to crack could be reduced to “mere hours or days” under quantum computing. This potential collapse of Bitcoin’s security model strikes at the heart of its “digital gold” narrative, which depends entirely on the immutable nature of ownership records.
Portfolio Reallocation Reflects Risk Management
The reallocation sees Wood moving 5% to physical gold and 5% to gold-mining stocks, returning to more traditional precious metals exposure. Despite this dramatic shift, Wood emphasized that the decision represents risk management rather than a critique of Bitcoin’s recent performance. Since his model portfolio first added Bitcoin on December 17, 2020, the cryptocurrency has delivered impressive returns of 325%, significantly outpacing gold bullion’s 145% gain over the same period.
At current levels, with Bitcoin trading at $90,941, Wood’s timing appears driven by long-term structural concerns rather than short-term price action. The strategist explicitly stated he does not expect quantum computing to dramatically impact Bitcoin’s price in the near term, but argued that the store-of-value concept is now “clearly on less solid foundation from the standpoint of a long-term pension portfolio.”
Industry Response and Governance Challenges
The quantum threat has already sparked debate within Bitcoin’s development community about potential responses. Wood referenced discussions about whether to “burn” quantum-vulnerable coins to protect system integrity or to accept that such coins could be stolen by entities possessing quantum computers. He characterized this as a fundamental conflict between preserving Bitcoin’s property-rights ethos and implementing what could appear as confiscatory policy measures.
One computer scientist Wood consulted described the “do-nothing” approach as a “suicidal delusion,” highlighting the severity of the decision facing Bitcoin’s governance structure. The decentralized nature of Bitcoin’s development process means any quantum-resistant upgrades would require years of consensus-building, unlike traditional financial systems that can implement top-down changes rapidly.
VanEck Pushes Back on Quantum Concerns
VanEck’s head of research Matthew Sigel, who first highlighted Wood’s portfolio change on social media, offered a more sanguine view of the quantum challenge. While acknowledging the legitimacy of Wood’s concerns, Sigel argued that the issue is “solvable” and comparable to previous “walls of worry” Bitcoin has faced, such as the blocksize wars that dominated development discussions in earlier years.
Sigel drew sharp distinctions between Bitcoin’s governance challenges and traditional financial systems’ ability to respond to quantum threats. “Banks upgrade top-down; BTC requires years of consensus,” he noted. “Banks have an ‘undo’ button; BTC is finality-first.” This structural difference could leave Bitcoin more vulnerable to quantum attacks than conventional financial infrastructure.
Despite his disagreement with Wood’s conclusion, Sigel emphasized that the Jefferies strategist “came to it honestly” after thorough research. VanEck has taken a middle-ground approach, adding some quantum exposure hedges while maintaining spot Bitcoin ETF holdings as the largest position in their Onchain Economy ETF.
Market Implications and Strategic Positioning
Wood’s portfolio shift represents more than a single strategist’s risk assessment—it signals how institutional investors may increasingly weigh long-term technological risks against Bitcoin’s investment merits. The move comes at a time when Bitcoin has gained significant institutional acceptance, with multiple spot ETFs trading and corporations adding the cryptocurrency to their treasury holdings.
The quantum computing debate also highlights the tension between Bitcoin’s fixed monetary policy and its technological adaptability. While Bitcoin’s resistance to arbitrary changes has been a key selling point for institutional investors, that same resistance could become a vulnerability if rapid technological upgrades become necessary for survival.
For pension funds and other long-duration investors, Wood’s analysis raises uncomfortable questions about Bitcoin’s suitability for portfolios that need to preserve value across multiple decades. The mere possibility of cryptographic compromise, even if years away, may be sufficient to disqualify Bitcoin from the most conservative institutional allocations.
Current Market Position
As quantum computing concerns ripple through institutional circles, Bitcoin continues trading at $90,941, reflecting the market’s current focus on near-term catalysts rather than long-term technological risks. However, Wood’s high-profile exit may signal the beginning of a broader institutional reassessment of cryptocurrency’s role in long-duration portfolios, particularly as quantum computing development accelerates beyond theoretical timelines into practical implementation windows.