Christopher Wood, Global Head of Equity Strategy at Jefferies, has announced a fundamental shift in his long-term investment strategy, eliminating the previously recommended 10% allocation to Bitcoin (BTC). The decision stems from growing anxiety regarding the potential existential threat posed by rapidly advancing quantum computing technology to the cryptocurrency’s cryptographic security.
Wood, a long-time advocate for Bitcoin as a ‘digital gold’ hedge against fiat debasement, detailed the move in his weekly ‘Greed and Fear’ investor note. The entire 10% allocation previously held in Bitcoin has been redirected back into traditional physical gold and precious metal exposure.
The core of Wood’s concern focuses on the vulnerability of the Elliptic Curve Digital Signature Algorithm (ECDSA), which underpins Bitcoin’s private key security and transaction verification. Experts widely agree that the arrival of powerful, fault-tolerant quantum computers could potentially break ECDSA, thereby compromising the network’s integrity and allowing malicious actors to steal funds.
While developers in the cryptocurrency community are actively exploring and testing post-quantum cryptography solutions, Wood noted that the uncertain timeline for both the implementation of these solutions and the simultaneous deployment of highly disruptive quantum machines introduces an unacceptable risk premium for long-term holders. Consequently, Wood has determined that, until post-quantum security measures are definitively integrated, traditional physical gold remains the safer and more reliable form of long-term insurance against financial system instability.
Source: Jefferies’ Wood drops 10% bitcoin allocation over quantum computing fears
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