Jefferies Global Head Exits Bitcoin; Allocates 10% to Gold on Quantum Threat

Christopher Wood, Global Head of Equity Strategy at Jefferies, has eliminated his model portfolio’s 10% Bitcoin allocation, redirecting the capital entirely into physical gold and gold miners. In his widely read Greed & Fear newsletter released Friday, Wood cited the accelerating timeline of "cryptographically relevant" quantum computing as an existential risk to the asset’s long-term security architecture.

The strategist, who first entered Bitcoin in December 2020 at $22,779, wrote that while an immediate price collapse is unlikely, the "store of value concept is clearly on less solid foundation from the standpoint of a long-term pension portfolio." The liquidated funds were split evenly: 5% to physical gold bullion and 5% to gold-mining equities.

"The existential issue raised by quantum as regards Bitcoin can only be long-term positive for gold since it remains the historically stress tested store of value."

The ‘Satoshi-Era’ Vulnerability

Wood’s pivot relies on data regarding the exposure of early Bitcoin addresses. Citing research from Chaincode Labs, the note highlights that 20% to 50% of the total Bitcoin supply (approximately 4 to 10 million BTC) resides in addresses utilizing older Pay-to-Public-Key (P2PK) scripts or addresses with previously exposed public keys.

Unlike modern hashed addresses (P2PKH), these legacy formats, including the estimated 1 million BTC mined by Satoshi Nakamoto, expose the raw public key on-chain. This vector theoretically allows a sufficiently powerful quantum machine to derive the private key via Shor’s algorithm, bypassing the Elliptic Curve Digital Signature Algorithm (ECDSA) that secures the network.

Market Context & Performance

Despite the exit, Wood acknowledged Bitcoin’s dominance during his holding period, noting it rose 325% since his initial entry compared to gold’s 145%. Bitcoin traded around $96,950 on Friday, remaining roughly 23% below the $126,000 cycle peak Jefferies estimates was reached earlier in the post-halving rally.

The firm now views gold as the sole hedge against both monetary debasement and geopolitical risk, untethered from the technological obsolescence risks facing digital assets. Wood warned that the quantum timeline, previously thought to be decades away, "could be just a few years away," forcing a re-evaluation of risk for institutional custodians holding static assets in cold storage.