The broker said advances in quantum computing are accelerating the timeline for crypto risk, but argued Bitcoin faces a multi-year upgrade cycle, not an existential crisis.

What to know:

• Bernstein warned quantum computing is a growing threat to Bitcoin’s cryptography, with timelines moving closer than previously expected.
• The risk is concentrated in older wallets, while core network functions like mining remain largely secure.
• Bitcoin and crypto have a three to five year window to transition to post-quantum security through protocol upgrades and wallet changes, the broker said.

Wall Street broker Bernstein said the rise of quantum computing poses a credible but manageable threat to Bitcoin and the broader crypto ecosystem, as recent breakthroughs compress timelines for potential attacks on modern cryptography.

Advances such as Google Quantum AI’s reported reduction in qubit requirements suggest the risk is no longer a distant, decade-long concern, the broker noted. Still, the firm cautioned that scaling quantum systems to the level needed to break widely used encryption remains a complex, multi-step challenge.

«Quantum should be seen as a medium to long term system upgrade cycle rather than a risk,” analysts led by Gautam Chhugani said in the Wednesday report.

Quantum computing uses the principles of quantum mechanics rather than classical physics. Instead of binary bits, it relies on qubits that can exist in multiple states at once, a property known as superposition, allowing many possibilities to be processed simultaneously.

Combined with entanglement, this enables quantum systems to solve certain problems, such as breaking encryption, far more efficiently than classical computers.

Quantum computers could eventually weaken cryptographic systems like elliptic curve encryption, which underpin crypto wallets, by solving problems beyond the reach of classical machines. However, the report said the threat spans industries from finance to defense and should be viewed as a manageable, long-term risk rather than an existential one for Bitcoin.

Exposure is concentrated in roughly 1.7 million BTC held in older, “legacy” wallets, while newer practices and protocols reduce vulnerability. Bitcoin mining, which relies on SHA-based hashing, remains effectively secure even in advanced quantum scenarios, the broker said.

Bernstein expects the crypto industry to have sufficient time, around three to five years, to transition toward post-quantum cryptography, with upgrades such as new wallet standards, reduced address reuse and key rotation already under discussion.

One recent academic paper said that attacking the Bitcoin blockchain through quantum mining would demand the energy output of a star.