Crypto firms prepare defenses as quantum threat to encryption draws nearer

The cryptocurrency industry is beginning to brace for the quantum‑computing threat, as recent progress raises worries that the technology could soon break the cryptography securing transactions and digital wallets.

Quantum computers can tackle complex math far quicker than today’s advanced machines, and they might decode the standard encryption protecting digital data. This poses a risk to the $2 trillion worldwide crypto market, which relies on blockchains guarded by legacy cryptography and has already suffered notable hacks.

Although quantum technology is still mostly experimental, worries in the crypto sector have risen after March research from Alphabet’s Google—a leader among tech firms pursuing the field—indicated that quantum machines could defeat current cryptography earlier than thought, per executives and analysts. Google predicts that encryption‑breaking quantum computers could appear by 2029, earlier than the earlier estimate of at least ten years away.

Studies from Citigroup and other analysts also conclude that quantum computing, coupled with AI advances, has shortened the window before cryptocurrencies face broad hacking threats. Recognizing the danger to both public and private sectors, U.S. President Donald Trump issued executive orders last month aimed at strengthening the nation’s quantum capabilities.

Several crypto firms and blockchain developers have begun drafting plans to replace their networks with quantum‑resistant cryptography, a multi‑year undertaking that may necessitate extensive overhauls of the infrastructure supporting digital assets.

“It represents the most direct and existential danger to cryptocurrencies and their networks,” said Chris Tam, head of quantum innovation at BTQ Technologies, a firm specializing in quantum security.

BLOCKCHAINS USE DECADES-OLD CRYPTOGRAPHY

Most blockchains depend on decades‑old elliptic‑curve cryptography to create the public and private keys and digital signatures that verify crypto‑asset ownership and authorize transactions. Public keys are derived mathematically from private keys and, in many networks, become visible to anyone after a transaction involving the assets.

Standard computers cannot realistically reverse‑engineer a private key from its public counterpart, but a sufficiently powerful quantum computer could achieve this, enabling attackers to forge signatures and sanction illicit transactions.

This risk is especially pronounced for public crypto networks, where transactions, unlike conventional payments, cannot be reversed.

“Crypto is uniquely vulnerable because blockchains are transparent and immutable,” said Utkarsh Ahuja, managing partner at Moon Pursuit Capital, a crypto‑focused investor.

Bitcoin, the leading cryptocurrency, is deemed especially vulnerable; its 17‑year transaction history has produced a substantial pool of exposed public keys.

Approximately 35 % of the token’s circulating supply might be vulnerable to a quantum‑computing attack, per an unpublished June 2026 working paper by independent researcher Ahmed Raza Muhammad Umer; other recent research suggests the exposure could reach as high as 50 %.

A single breach in which a hacker steals and dumps a large quantity of a token could collapse its price, warned Cristiano Ventricelli, vice president and senior analyst for digital assets at Moody’s Ratings. “Everyone will feel the impact,” he added.

This risk has led some investors to reconsider their Bitcoin holdings. Christopher Wood, the widely followed global head of equity strategy at Jefferies, cut a 10 % Bitcoin allocation from his model portfolio in his January newsletter, citing the long‑term “existential” danger posed by quantum computing.

BLOCKCHAIN UPGRADE PLANS TAKE SHAPE

Ahuja and other experts maintain that quantum computers capable of breaking blockchains are still a few years away, and that the industry can transition to new “post‑quantum” cryptography designed to resist such attacks.

Numerous crypto leaders caution that adopting post‑quantum solutions prematurely could introduce new weaknesses, as the technology is still evolving. Post‑quantum digital signatures tend to be far larger than conventional ones, boosting storage and bandwidth demands, which may increase costs and impair user experience—especially on chains with fixed block sizes like Bitcoin. Zach Pandl, head of research at crypto‑asset manager Grayscale, noted these challenges but expressed confidence that blockchains will eventually overcome them.

“There is an engineering challenge ahead, but viable solutions are already available,” he added. Overcoming it may take years; a senior cybersecurity officer at a major crypto firm estimates his company will need two years to achieve full quantum resistance. He and others likened the effort to a Y2K‑style overhaul, during which over $300 billion was spent worldwide to fix the millennium bug.

The issue is particularly complex for blockchains, which are largely decentralized and governed by communities that may struggle to consensus on a forward path, according to Tam of BTQ Technologies.

Interviewees report that none of the top 20 blockchains have yet deployed a post‑quantum signature algorithm. In Bitcoin’s case, developers and market participants remain split on which remedy to adopt and when to implement it, executives noted. The Ethereum Foundation, which supports the blockchain underlying ether—the second‑largest cryptocurrency—states it aims for complete quantum protection by 2029.

“The worst‑case scenario is that it occurs far earlier than we anticipate,” said Christopher Smith, CEO of Quantus, a blockchain that already employs post‑quantum cryptography.

The Algorand Foundation, which backs the Algorand blockchain whose native token is valued at roughly $780 million, is among the early adopters. Last month it released a post‑quantum roadmap and intends to begin supporting post‑quantum accounts later this year, according to Bruno Martins, the foundation’s chief technology officer.

“It felt appropriate to act now, as having a plan is the responsible course,” Martins added.

Published on July 8, 2026