Christopher Wood, the strategist behind Jefferies' 'Greed & Fear' newsletter, has made a decisive portfolio shift: he sold the entire 10% Bitcoin position and reinvested the proceeds into physical gold and gold mining equities. Wood warned that progress in quantum computing poses an 'existential threat' to Bitcoin's security model.
Quantum Computing: Bitcoin's Cryptographic Time Bomb
In his latest letter, Wood detailed how sufficiently powerful quantum machines could enable attackers to derive private keys from public keys, breaking the Elliptic Curve Digital Signature Algorithm (ECDSA) that underpins Bitcoin. 'For pension-style long-term investors, Bitcoin is no longer reliable,' Wood wrote. He argued that the risk has moved from theoretical speculation into a foreseeable time frame.
While Blockstream CEO Adam Back and other core developers remain skeptical about the imminence of such an attack, financial institutions are taking note. Wood's move marks the first time a well-known Wall Street strategist has publicly treated quantum computing as a core variable in asset allocation decisions.
Gold Regains Favor Among Institutions
Wood replaced Bitcoin with physical gold and gold mining stocks, emphasizing that gold is immune to algorithm upgrades or hardware breakthroughs. 'Quantum computing cannot change the weight of a gold bar,' he quipped. The rebalancing is especially symbolic: Jefferies' flagship model portfolio had included Bitcoin for years before this outright removal.
The quantum threat to digital assets has been flagged by analysts such as Nic Carter and Luke Gromen, as well as reports from EY and PwC indicating that current asymmetric cryptography could be broken within two decades. Wood prefers to exit early rather than wait for a potential Bitcoin protocol upgrade (e.g., Lamport signatures or lattice-based cryptography).
Bitcoin's price has not reacted significantly to the news so far, but market observers suggest that if more strategists follow Wood's lead, a broader revaluation of crypto asset security could follow.