Asset management firm Ark Invest said quantum computing is a long-term consideration for Bitcoin security but is not an imminent threat.
In a report co-authored with Unchained on Wednesday, the investment manager said today’s quantum computers fall far short of the power needed to break Bitcoin cryptography, which relies on elliptic curve cryptography to protect wallets.
“Today’s quantum systems lack the capabilities needed to disrupt Bitcoin,” wrote Dhruv Bansal, co-founder and CSO of Unchained. Tom Honzik, Director of Custody Research at Unchained; David Puell, Trading Analyst and Deputy Portfolio Manager of Digital Asset Research at Ark Invest.
Even if quantum systems eventually reach this level, risks may emerge over time and be costly to attackers, the report said.
One of the main reasons Bitcoin doesn’t face an immediate threat is that a major breakthrough in quantum computing could disrupt broader internet security first, prompting a coordinated response from governments, technology companies, and financial institutions before impacting Bitcoin.
The report comes as long-term investors grapple with the possibility that advances in quantum computing could one day break the cryptography that underpins Bitcoin, fueling speculation about a potential security crisis.
Earlier this year, prominent portfolio strategist at Jefferies Christopher Wood said investors should reduce their Bitcoin allocations by 10% and add gold instead due to the quantum threat. The move unsettled investors and shocked the digital asset market.
35% of supply at risk
Although researchers generally believe such capabilities are far off, the prospect that powerful quantum machines could eventually crack private keys or old wallet formats has raised concerns among investors about the long-term risks to Bitcoin and the broader digital asset ecosystem.
Ark’s report estimates that approximately 35% of the Bitcoin supply is located in address types that are theoretically vulnerable to future quantum attacks, including approximately 1.7 million BTC believed to be lost, and approximately 5.2 million BTC that could be migrated to more secure wallets.
One of the wallets holds approximately 1 million Bitcoins and belongs to Satoshi Nakamoto, the creator of the Bitcoin network.
However, rather than seeing a sudden “Q-Day,” Ark Investments has seen these developments unfold in several different phases over the years. The report notes that some investors are concerned that the first attack could occur before 2030, while others believe it could be “decades later.”
The report believes that in either case, the Bitcoin community may have time to upgrade the network with quantum-resistant encryption and encourage users to move coins to more secure address formats.
“The good news is that we already know how to protect against quantum attacks,” the report said.
“The majority of the Bitcoin supply is held in quantum-resistant addresses, with the remainder held in quantum-susceptible addresses, which will not be at risk until the third phase of our timeline, when there is a CRQC that can crack the 256-bit ECC key.”
As of the time of publication, the world’s largest cryptocurrency is trading at around $70,000.
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