- Bitcoin has fallen back toward the $100,000 mark after a recent surge and ongoing price swings.
- BlackRock added a warning about quantum computing risk in its spot bitcoin ETF filings.
- Concerns about quantum technology focus on its ability to break current cryptography that secures digital assets like bitcoin.
- BlackRock’s ETF now holds nearly 3% of all bitcoin, worth about $62 billion at current prices.
- Experts highlight the entire blockchain sector is not yet ready to defend against future quantum computer attacks.
Bitcoin prices fell sharply, dropping back toward $100,000 after recent volatility in the crypto market. The decline comes as traders remain anxious about potential shocks and new risks in digital assets.
Earlier this week, the price of bitcoin rose above $105,000 before reversing course. According to new regulatory filings, the world’s largest asset manager, BlackRock, has updated its spot bitcoin exchange-traded fund (ETF) risk disclosure to include concerns about quantum computing.
If quantum computing technology is able to advance […] it could potentially undermine the viability of many of the cryptographic algorithms used across the world’s information technology infrastructure, including the cryptographic algorithms used for digital assets like bitcoin, BlackRock‘s filing stated. The firm, which manages around $10 trillion for investors, helped launch several spot bitcoin ETFs on Wall Street in January 2024.
BlackRock’s IBIT spot bitcoin ETF has become one of the fastest growing of all time, holding nearly 3% of the total 21 million bitcoin that will ever exist. At current rates, this holding is valued at about $62 billion. Some observers have warned this level of concentration could give BlackRock significant influence over the bitcoin network.
Bloomberg Intelligence ETF analyst James Seyffart explained that listing potential risks is typical industry practice. [BlackRock is] going to highlight any potential thing that can go wrong with any product they list or underlying asset that’s being invested in, he said in a post on X. However, according to experts, quantum computing has become a more urgent issue as major technology companies, including Google, make progress in this area.
David Carvalho, chief executive at Naoris Protocol, a decentralized blockchain company, wrote, At this point, no blockchain is ready to withstand a quantum attack when this becomes possible, which could very well be much earlier than 2030. He questioned why the blockchain sector has not addressed this risk more proactively.
A fully operational quantum computer could theoretically break the encryption that protects blockchains like bitcoin. Even though software updates could fix these vulnerabilities, there is concern about timing and readiness across the industry.
In February, Tether CEO Paolo Ardoino predicted that quantum computing might eventually allow Hackers to access dormant or inactive bitcoin wallets, including coins linked to the anonymous bitcoin creator, Satoshi Nakamoto. Ardoino called for efforts to develop "quantum-resistant addresses," but added, quantum computing is still very far from any meaningful risk of breaking bitcoin cryptography (Ardoino’s post).
For more information, see BlackRock’s latest regulatory filing.
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