Kevin O’Leary flags quantum computing as barrier to larger Bitcoin bets

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O’Leary flags Bitcoin quantum risk

Institutions cap Bitcoin at 3%

O’Leary described quantum computing as a “new concern floating around now,” suggesting that even a hypothetical risk can shape real-world investment decisions. The fear centers on the idea that sufficiently advanced quantum computers could one day crack the cryptographic systems that secure blockchain networks.

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According to O’Leary, institutions are unwilling to significantly increase their Bitcoin exposure until the industry demonstrates a credible defense against that risk. “Until that gets resolved, don’t expect them to go beyond a 3% allocation. They’ll stay cautious, they’ll stay disciplined, and they’ll wait for clarity. That’s the reality,” he said.

His comments reflect broader unease in some corners of traditional finance. Christopher Wood, global head of equity strategy at Jefferies, recently removed a 10% Bitcoin allocation from his model portfolio, citing quantum-related concerns. Wood argued that meaningful advances in quantum computing could weaken Bitcoin’s appeal as a long-term store of value, particularly for pension-style investors.

Some market analysts have even suggested that rising awareness of quantum risks may have coincided with Bitcoin’s recent underperformance relative to gold, though direct causation remains debated.

Developers explore technical safeguards

Bitcoin’s developer community has begun exploring potential countermeasures. Last week, Bitcoin Improvement Proposal 360 (BIP 360) was merged into the official BIP repository, allowing it to be formally considered for future updates.

The proposal introduces a new output format designed to reduce exposure of public keys on the blockchain. “Pay-to-Merkle-Root (P2MR) is a proposed new output type that commits to the root of a script tree. It operates with nearly the same functionality as P2TR (Pay-to-Taproot) outputs, but with the quantum vulnerable key path spend removed,” the proposal reads.

By limiting how and when public keys are revealed, the design aims to reduce potential vulnerability to future quantum attacks. However, BIP 360 has not been approved or scheduled for activation.

Conclusion

Quantum computing remains largely theoretical in its threat to Bitcoin, but institutions are already factoring it into allocation decisions. O’Leary says most large investors will not exceed a 3% Bitcoin exposure until clearer safeguards emerge. Meanwhile, developers are working on technical upgrades that could strengthen the network against future cryptographic breakthroughs.

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