Christopher Wood, Global Head of Equity Strategy at Jefferies, has completely removed Bitcoin from his investment portfolio, citing concerns that rapid advancements in quantum computing could undermine the cryptocurrency.
On January 16, Christopher Wood stated in an analysis column that progress in the field of quantum computing would weaken Bitcoin's logic as a "reliable store of value," particularly for long-term investors such as pension funds.
He liquidated the entire 10% Bitcoin allocation in his portfolio model, reallocating it to 5% physical gold and 5% gold mining stocks.
He explained that this decision was driven by concerns that the advent of quantum computing could shake the foundation of Bitcoin, with the technology potentially achieving breakthroughs in a few years rather than a decade or more.
Quantum computers could theoretically crack Bitcoin's encryption algorithms, reverse-engineering the private keys used to authorize transactions. Wood stated:
It would destroy the concept of Bitcoin as a store of value, thereby undermining its status as a digital alternative to gold.
Wood was an early institutional supporter of Bitcoin, adding it to his portfolio in December 2020 during the pandemic when countries unleashed massive stimulus measures and concerns about dollar devaluation intensified. He increased the allocation to 10% in 2021.
The Bitcoin community is increasingly concerned that quantum computing might become a reality in just a few years, rather than a decade or more.
Wood believes that the long-term issues raised by quantum computing are "only long-term positive for gold." He described gold as a historically proven hedge in an increasingly uncertain geopolitical environment.
