Christopher Wood, global head of equity strategy at Jefferies, has decided to remove the entire 10% allocation to Bitcoin (BTC) from his model portfolio.
Here’s the argument behind his decision Concerns related to advances in quantum computing He also discussed the potential impact it would have on the security of the Bitcoin network, according to a report published by Bloomberg on January 16th.
As Wood explained, advances in the field of quantum computing could weaken Bitcoin’s case. Act as a trusted store of valueespecially for long-term institutional investors.
Within this framework, he noted that within the Bitcoiner community itself there is growing concern that this technology is dangerous. “It could be just a few years away, not more than a decade.”
The decision is surprising given Wood’s history with digital assets.
He was one of the first institutional supporters of Bitcoin. Added to model portfolio in December 2020In a context characterized by monetary stimulus applied during the pandemic and concerns about a weakening dollar. Even before NFTs came along.
In 2021, the exposure increased to reach 10% of the portfolio. Now, strategists have chosen to refocus allocations on assets with longer trajectories.
Instead of Bitcoin, Allocate 5% of your portfolio to physical gold and an additional 5% to stocks of gold mining companiesreinforcing the preference for equipment that is considered a traditional refuge against structural risks.
Bitcoin, quantum, and the growing debate
The Bitcoin network is supported by cryptographic mechanisms that allow for the protection of funds and the verification of transaction signatures. This task uses elliptic curve cryptography, known by the acronym ECDSA (Elliptic Curve Digital Signature Algorithm).
As CriptoNoticias explained, the possibility that future quantum computers could break this encryption has sparked a heated debate among experts.
Some see a looming threat. Among them is Charles Edwards, founder of financial firm Capriol, who has advocated for Bitcoin to be protected from quantum computing by 2028.
Others, like Adam Back, co-founder of Blockstream and one of the Bitcoin ecosystem’s best-known developers, see quantum as a danger decades away.
Wood also expressed his opinion on issuing new Bitcoins through the mining process. proof of work (PoW) is governed by similar cryptographic principles, so threats to that system are potentially existential in nature.
Please note that Bitcoin mining is secured by hash functions, specifically SHA-256. considered to be quantum resistant.
