CoinShares latest report refutes the quantum computing threat, stating that only 10,200 bitcoins are truly at risk, far below the previous estimate of 20-50%. Cracking would require a system 100,000 times more powerful than current quantum computers, and the threat is at least ten years away. The report opposes radical measures like destroying vulnerable bitcoins.
Quantum Computing Risks Overestimated, Only a Small Fraction of 1.6 Million BTC Truly at Risk
CoinShares Bitcoin research director Christopher Bendiksen’s report directly addresses recent high-end risk exposure estimates that have caused institutional concern. The study by Chaincode Labs researchers Anthony Milton and Clara Shikhelman, published in May 2025, is widely cited; it estimates that 20% to 50% of circulating bitcoins could be vulnerable to quantum key theft techniques. CoinShares believes these figures conflate very different risk exposure categories.
CoinShares narrows the scope to traditional pay-to-public-key (P2PK) addresses, where the public key is permanently stored on-chain. The company estimates about 1.6 million bitcoins (roughly 8% of the total supply) are stored in these addresses. But the key finding is that only about 10,200 bitcoins are stored in sufficiently large addresses, and if these addresses are compromised, it could cause “significant market turmoil.”
The remaining bitcoins are scattered across over 32,000 independent UTXOs, averaging about 50 bitcoins per UTXO. The report states that even under very optimistic quantum computing scenarios, cracking these UTXOs would take an extremely long time. CoinShares notes that the so-called 25% vulnerability exploitation rate often includes some temporary risks, such as address reuse by exchanges, which are easily avoidable.
This precise risk assessment is crucial for understanding the quantum computing threat. Differentiating the total exposure of 1.6 million BTC from the actual market risk of 10,200 coins means that only about 0.05% of the total supply could potentially trigger systemic issues. This figure is vastly lower than the previous estimate of 20-50%, fundamentally changing the basis of risk evaluation.
Grantham’s Bitcoin Liquidation Due to Quantum Computing Questioned
CoinShares’ report directly challenges some institutional investors’ aggressive reactions. According to The Block, when Christopher Wood of Grantham in January canceled his entire 10% bitcoin allocation in his model portfolio, he cited Chaincode Labs’ higher estimates and described the quantum computing risk as a “survival” threat to Bitcoin’s store of value theory.
Wood wrote: “While GREED & fear believe that quantum computing issues won’t cause a huge impact on Bitcoin prices in the short term, from a long-term pension fund perspective, the concept of store of value is clearly not solid enough.” This extreme caution has triggered a chain reaction in the institutional circle, with some investors re-evaluating Bitcoin’s long-term allocation value.
However, CoinShares’ latest research shows that this panic may be based on exaggerated risk assessments. When actual exposure is revised from 20-50% to 0.05%, the investment logic fundamentally changes. For long-term value investors, quantum computing risk shifts from a “survival threat” to a “manageable engineering challenge,” and this shift in perception could reshape Bitcoin’s role in institutional portfolios.
The Quantum Computing Power Needed to Crack Bitcoin Remains Out of Reach
CoinShares dismisses the notion of an imminent threat. Bendiksen cites published research indicating that cracking a public key in one day requires a fault-tolerant quantum computer with 13 million physical qubits, about 100,000 times the capacity of current largest computers. To crack a key in one hour, a system about 3 million times more powerful than existing hardware is needed.
Ledger’s Chief Technology Officer Charles Guillemet told CoinShares: “Cracking current asymmetric encryption requires millions of quantum bits. Google’s current quantum computer Willow has 105 qubits. Moreover, each additional qubit exponentially increases the difficulty of maintaining system coherence.”
Technical Barriers to Quantum Computing Cracking Bitcoin
Crack in one day: requires 13 million qubits (10^5 times stronger than current systems)
Crack in one hour: requires a system 3 million times more powerful than existing hardware
Current top quantum computer: Google Willow with 105 qubits
Technical challenge: each added qubit exponentially increases coherence maintenance difficulty
These figures clearly outline the realistic landscape of the quantum computing threat. Expanding from 105 to 13 million qubits is not just a linear increase but an exponential leap in technical complexity. Maintaining qubit coherence is one of the biggest challenges faced by current quantum computers; as the number of qubits increases, system stability drops sharply. This means that even under the most optimistic technological forecasts, the threat is at least ten years away.
Destroying Vulnerable Bitcoins Would Contradict Core Principles
The report also touches on a highly controversial governance debate. Notable figures like crypto punk Jameson Lopp advocate for soft forks to destroy bitcoins vulnerable to quantum attacks. CoinShares takes the opposite view, arguing that destroying bitcoins held passively due to inactivity would violate property rights protections.
“I believe the idea of destroying bitcoins that don’t belong to oneself is completely contrary to the spirit of Bitcoin,” Bendiksen wrote in a related report last August. This perspective touches on core philosophical issues of Bitcoin governance: when facing potential technological threats, does the community have the unilateral right to confiscate user assets, even if those assets are considered “vulnerable” or “dormant”?
CoinShares also warns that before quantum-secure address formats are fully validated, premature adoption could introduce serious vulnerabilities and waste development resources. CoinShares recommends a gradual approach. Cryptographer Adam Back told CoinShares that Bitcoin “can adopt post-quantum signatures” and “continue to evolve defensively.”
This incremental approach sharply contrasts with radical interventions. One of Bitcoin’s core values is the inviolability of property rights; any precedent allowing the community to destroy funds at specific addresses could open the door to broader future interventions. From this perspective, the quantum computing threat is not just a technical issue but a test of governance philosophy.
Market Turmoil and Accelerating Post-Quantum Preparedness
This report comes amid market turbulence. According to The Block’s Bitcoin price page, Bitcoin has fallen nearly 50% from its peak above $126,000 in October 2025, currently trading around $70,400, after briefly dropping below $61,000 earlier this week. The Block previously reported that CoinShares’ weekly fund flow data showed $1.7 billion flowed out of crypto investment products last week.
Nevertheless, investment in quantum preparedness continues to accelerate. According to The Block’s January report, Project Eleven recently completed a $20 million Series A funding round, valuing it at $120 million, aiming to build post-quantum tools for crypto networks. Meanwhile, Strategy Chairman Michael Saylor dismissed concerns about quantum computing in a recent earnings call, calling it “a series of terrible FUD.”
On Ethereum, co-founder Vitalik Buterin has previously commented on how blockchain should respond to emerging quantum threats, and the Ethereum Foundation has recently established a dedicated team for post-quantum security issues. Buterin said: “We should avoid falling into the trap of delaying quantum resistance for the sake of efficiency for a limited time.”
CoinShares believes that for institutional investors, “quantum computing risk is manageable and has a longer resolution timeline.” This assessment provides a more rational risk framework for the market, avoiding capital outflows driven by excessive panic.
