Is the Quantum Computer Threat to Bitcoin Real? Could the Encryption of 7 Million BTC Be Broken?

While debates on Wall Street about whether quantum computers pose an existential threat to Bitcoin (BTC) have intensified over the past year, Benchmark analysts are countering the growing alarmism. According to the firm, while the risk is real, it is “long-term” and “manageable.”

In a published research note, Benchmark analyst Mark Palmer acknowledged that quantum computing poses a theoretical vulnerability to Bitcoin’s cryptography. However, Palmer stated that practical attacks are “decades, not years” away, indicating that there is sufficient time for the network to adapt before the threat becomes acute.

Bitcoin relies on cryptography to secure wallets and authorize transactions. In theory, a sufficiently powerful quantum computer could bypass this protection by deriving private keys from publicly available information. According to Palmer, this risk only applies to Bitcoins in addresses whose public keys have been previously disclosed; it does not pose a threat to the entire supply.

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According to the report, approximately 1–2 million BTC are held in publicly disclosed addresses, such as reused addresses or early “Satoshi era” wallets. This estimate is more conservative than the 7 million BTC level suggested by some researchers.

Higher-end estimates are more consistent with assessments made last month by K33 Research Director Vetle Lunde. Lunde had said that theoretically, 6.8 million BTC could be vulnerable in a future quantum scenario, but the timeline remains uncertain and the issue requires developer coordination, not panic selling.

Opinions on the timing also diverge sharply. In a post published in November 2025, venture capitalist and early Bitcoin investor Chamath Palihapitiya argued that the quantum threat could emerge within the next 2–5 years, narrowing the window for defense updates. In contrast, cryptographer Adam Back, a longtime contributor to Bitcoin, stated that the risk is “at most 20–40 years away.”

Benchmark also rejected the claim that Bitcoin is resistant to change. Reminding that the network has previously adapted to material risks, the institution cited upgrades like Taproot as an example, and stated that the transition to quantum resilience could follow a gradual path rather than a sudden protocol change.

*This is not investment advice.

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