Value storage narrative faces threat from quantum computing! Senior strategist backs away as Bitcoin prepares for rebound.

The seemingly distant threat of quantum computing has prompted a senior market strategist to abandon investments in Bitcoin, highlighting growing concerns about the security of the cryptocurrency entering mainstream investment portfolios. Reportedly, Christopher Wood, global equity strategist at Jefferies, has removed 10% of his Bitcoin allocation from his portfolio, citing concerns that the emergence of quantum computing could undermine the value of this cryptocurrency. Wood stated that advancements in this field will weaken the argument for Bitcoin as a reliable store of value, especially for long-term investors like pension funds. He added that the Bitcoin community is increasingly worried that quantum computing "may arrive in just a few years rather than the decade or more". The foundation of the Bitcoin network relies on encryption technology to protect tokens and verify transactions. It is currently impossible to crack this encryption technology with today's computers. However, quantum computers could change this, allowing attackers to deduce private keys (used to authorize transfers) from public keys. Wood pointed out that Bitcoin mining is also governed by encryption technology rules, and any threats to the system "could have a decisive impact, as it disrupts Bitcoin as a store of value and as a concept of digital gold". Wood was an early institutional supporter of Bitcoin and added this cryptocurrency to his portfolio in December 2020. He increased his Bitcoin allocation in 2021, resulting in a total exposure of 10%. Now, he is shifting his focus to assets with a longer history, replacing the Bitcoin allocation with 5% physical gold and 5% gold mining stocks. After Bitcoin's sharp drop on October 10 last year, the debate over whether quantum computing poses a threat to Bitcoin and other cryptocurrencies has intensified, with prominent developers providing counterarguments. Nick Carter, a partner at Castle Island Ventures, posted in December last year that Bitcoin developers are "in denial about the risks posed by quantum computing", but this statement was refuted by prominent Bitcoin advocates including Adam Back, CEO of Canadian blockchain company Blockstream. Wood believes that this debate itself illustrates the issue. He stated that the long-term issues raised by quantum computing "are just long-term bullish for gold" and described gold as a proven hedge tool in an increasingly uncertain geopolitical world. Improvements in technology boost expectations of a rebound in crypto assets. Bitcoin is brewing a new round of sustained recovery trend. As of the time of writing, Bitcoin is priced at $95,400 per coin. After months of volatility and market skepticism, Bitcoin is showing signs of transitioning from short-term trading opportunities to a medium-term uptrend. Several market indicators show that crypto assets are brewing a more sustainable rally. Unlike previous short-lived rebounds, this round of gains is more supported by improvements in technical structure rather than just emotions or momentum. Prices have reclaimed key moving averages, trend lines are starting to repair upwards, and every pullback is met with stable buying support. While short-term volatility persists, the overall technical picture shows a solid foundation for this rally. In recent months, many analysts have attributed the weak performance of crypto assets to the relative strength of traditional safe-haven assets like gold and silver, suggesting that once precious metals correct, crypto assets can find breathing space. However, market operations do not always strictly adhere to mean reversion. Recently, Bitcoin and other major tokens have shown signs of independent momentum, indicating that their rise is not just a result of capital rotation between different assets. In other words, Bitcoin and precious metals do not necessarily have to move in opposite directions; both types of assets could potentially rise together. Even if precious metals experience temporary setbacks, this could bring new incremental capital into the crypto market. Market analysis indicates that as Bitcoin approaches the important psychological level of $100,000, there may be consolidation in the short term, but the overall momentum remains clear. It is worth noting that despite ongoing discussions about Bitcoin, some ETFs tracking Bitcoin have shown lackluster performance over the past year, with prices still having over 20% downside from their recent 52-week highs. However, these products have recently shown signs of "warming up", with an increase of about 8% in the past week and are poised to record their first three consecutive weeks of gains in six months. In terms of technical patterns, the one-year daily chart of Bitcoin-related ETFs is gradually improving. In early January of this year, the fund reclaimed the 21-day exponential moving average and subsequently broke through the 50-day simple moving average. More notably, despite a deep retracement of around 35% between October and November last year, the slope of the 200-day moving average has not significantly weakened, indicating resilience in the medium to long-term structure. Multiple doji candles observed near key round numbers in December last year are considered signals of potential bottoms. With prices breaking out of an ascending triangle pattern recently, market expectations for further short-term upside have significantly increased.