Jefferies (JEF) has completely removed its Bitcoin (BTC-USD) position from its leading “Greed & Fear” model portfolio, a decision driven by new concerns over technological security. The firm’s global head of equity strategy, Christopher Wood, announced he is shifting that 10% allocation back into gold and gold-mining stocks.
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While Bitcoin has been a massive winner for the portfolio since 2020, Wood believes the long-term “store of value” argument is under threat from the rapid advancement of quantum computing.
Christopher Wood Exits the Digital Gold Trade
Since first adding Bitcoin to his portfolio in late 2020, Christopher Wood has been a high-profile institutional supporter of the asset. However, his latest move signals a significant change in heart. Wood explained that while he doesn’t expect a price crash tomorrow, the “store of value” concept is now on a “less solid foundation from the standpoint of a long-term pension portfolio.” He decided to redistribute the funds equally, putting 5% into gold bullion and 5% into gold mining companies.
Quantum Computers Challenge Cryptographic Safety
The primary driver for this exit is the looming arrival of “cryptographically relevant” quantum machines. Research cited by Wood suggests that as much as 20% to 50% of all circulating Bitcoin, roughly 4 to 10 million coins, could eventually become vulnerable to theft. This risk exists because older Bitcoin addresses and those that have been reused expose public keys, which a powerful enough quantum computer could potentially use to derive the private keys needed to move funds.
Bitcoin Performance Still Outpaces Gold
Despite the strategic exit, the numbers show that Bitcoin was a highly successful investment for the Greed & Fear strategy. Since Wood’s initial buy-in on December 17, 2020, Bitcoin has surged by 325%, whereas gold bullion has risen by 145% in the same timeframe. Wood acknowledged this performance but emphasized that for a multi-decade pension view, gold remains the “historically stress tested store of value”.
The crypto community is currently split on how urgent this threat really is. While strategists like Wood are moving capital now, many developers argue that we are still 20 to 40 years away from a quantum computer capable of breaking Bitcoin’s security. People who support Bitcoin believe the network has more than enough time to upgrade its security systems before quantum computers become a real threat.
However, for the big-money managers at Jefferies, even the tiny chance of a total collapse is enough to make them choose the safety of gold instead.
At the time of writing, Bitcoin is sitting at $95,513.98.
