Wall Street trader Bernstein said the rise of quantum computing poses a credible but manageable threat to Bitcoin and the broader crypto ecosystem, as recent advances compress the timelines for potential attacks on modern crypto.
Advances like Google Quantum AI’s reported reduction in qubit requirements suggest risk is no longer a decade-long, distant concern, the broker noted. Still, the company cautioned that scaling quantum systems to the level needed to break widely used encryption remains a complex, multi-step challenge.
“Quantum should be viewed as a medium to long-term system upgrade cycle and not a risk,” analysts led by Gautam Chhugani said in Wednesday’s report.
Quantum computing uses the principles of quantum mechanics instead of classical physics. Instead of binary bits, it is based on qubits that can exist in multiple states at once, a property known as superposition, which allows many possibilities to be processed simultaneously.
Combined with entanglement, this allows quantum systems to solve certain problems, such as breaking encryption, much more efficiently than classical computers.
Quantum computers could eventually weaken cryptographic systems like elliptic curve encryption, which underpins crypto wallets, by solving problems beyond the reach of classical machines. However, the report says the threat spans industries from finance to defense and should be seen as a manageable long-term risk rather than an existential one for Bitcoin.
The exposure is concentrated in approximately 1.7 million BTC held in older “legacy” wallets, while newer practices and protocols reduce vulnerability. Bitcoin mining, which relies on SHA-based hashing, remains effectively secure even in advanced quantum scenarios, the broker said.
Bernstein expects the crypto industry to have enough time, between three and five years, to transition to post-quantum cryptography, and updates such as new wallet standards, reducing address reuse, and key rotation are already being discussed.
A recent academic paper said that attacking the Bitcoin blockchain via quantum mining would require the energy production of a star.
Read more: Attacking bitcoin mining with a quantum computer would require the energy of a star, academics say
