By Jules Rimmer
Jefferies strategist Chris Wood is concerned about bitcoin's reputation as a store of value with the advent of 'cryptographically relevant quantum computers'
Quantum computing is going to be with us sooner than we thought, and its potential for cracking the code underlying the whole concept of bitcoin (BTCUSD) poses an existential threat, according to the concerns of one strategist. That means the cryptocurrency's claim to be a secure and reliable store of value could be in jeopardy.
This strategist, Chris Wood - a bullish advocate for bitcoin since 2020 - is sufficiently worried that he is eliminating his whole 10% recommended weighting in bitcoin from his recommended portfolio and reverting his allegiance back to gold (GC00).
Wood is the global head of strategy at Jefferies. He's a well-known commentator on financial markets who has expressed his opinions for 30 years in the popular weekly newsletter &#34;Greed and Fear.&#34; In December 2020, when bitcoin's price was $22,000, Wood told U.S. pension funds that their long-term portfolios should contain a 5% weighting in bitcoin as a digital alternative to gold.  The following November, he doubled it.
He said that bitcoin had become investible from the standpoint of institutional investors with custodial arrangements in place for digital assets.
Wood has been concerned about the dollar-debasement trade since 2002. He has consistently argued that asset allocations should include a 5% weighting in gold bullion and a 10% weighting in unhedged gold-mining stocks. Since 2020, when Wood began to divide his loyalties between gold and bitcoin, their respective returns have been 325% and 145%.
Although bitcoin has rebounded more than 20% from its November lows, it's still a long way from its record high. Chris Wood thinks the coin has peaked.
Recent discussions, though, have led Wood to worry that the whole investment case for bitcoin could unravel if the claims made about quantum computing are true. If the latter is only a year or two away, rather than the decade mathematicians previously thought, then the possibility looms that bitcoin's integrity could be breached and bitcoin wallets stolen or compromised.
Academic studies have suggested that these cryptographically relevant quantum computers may be able to unlock a private key &#34;in mere hours or days.&#34; Wood's research has led him to the conclusion that as much as 20-50% of all bitcoins in circulation, especially the oldest ones,  could be vulnerable to theft and/or compromise.
Since this issue is already &#34;live: within the bitcoin ecosystem, there may be some creative problem-solving before the potential threat becomes a clear and present danger, Wood said, but this may pose as many questions as it answers. Wood reallocated the 10% he removed from bitcoin and split it evenly between gold bullion and gold-mining stocks.
-Jules Rimmer
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(END) Dow Jones Newswires
01-19-26 1019ET

<p>Chris Wood, a strategist at Jefferies and a long-time bitcoin advocate, has exited his 10% bitcoin position due to concerns over quantum computing's potential to compromise bitcoin's security. He is reallocating his investments back to gold, citing that bitcoin's status as a reliable store of value is at risk. Wood's shift comes after significant returns from both bitcoin and gold since 2020, but he believes bitcoin may have peaked. He has split his removed bitcoin allocation evenly between gold bullion and gold-mining stocks.</p>

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This strategist and longstanding bitcoin bull exits his position and switches allegiance to gold