Quantum computing and cryptocurrency may both seem like speculative assets. While their practical use cases are growing, neither has achieved mainstream adoption, and market momentum remains largely driven by hype and retail investor enthusiasm.
But these technologies are real, and on a collision course.
Major financial institutions are waking up to the threat quantum poses to cryptocurrency, an increasingly prominent asset class. As far back as 2023, BlackRock -- the world's largest asset manager -- warned in securities filings that powerful enough quantum computers could compromise the security of the Bitcoin network.
Quantum's disruptive potential lies in the technology's ability to execute Shor's algorithm, a set of instructions that quickly finds the prime factors of any big integer. IBM researchers demonstrated this capability back in 2001, using an early quantum machine to factor the number 15 into 5 x 3.
The catch is that Shor's algorithm has only been executed around a dozen times in total, and only on small numbers. It has never been demonstrated outside a research setting.
Regardless -- as is often the case with quantum -- it's a sign of bigger things to come. Experts say the advent of more powerful machines years in the future will threaten the encryption safeguarding not just blockchain networks, but the networks used by banks and custodians. A May report from Moody's projected that a quantum attack on payment systems could render $2 trillion to $3 trillion in indirect losses.
"As digital finance markets attract a growing share of institutional clientele, cyber risk linked to blockchain-based platforms has evolved from a niche risk to one that is mainstream," the credit rating agency wrote at the time.
Financial institutions are aware of the risk, and they are responding accordingly. A group including BlackRock, ARK Invest, and Fidelity banded together on Thursday to form the Bitcoin Security Consortium.
The initiative is meant to support the long-term resilience of the Bitcoin network, backed by a $15 million commitment over the next three years. Aside from financial institutions, major Bitcoin holders Coinbase, Strategy, and Galaxy Digital are among the founding members.
For Strategy, the world's largest corporate holder of Bitcoin, participation in the initiative is a way to safeguard the cryptocurrency that dominates its balance sheet. "Funding the people who do this work, and helping inform the conversation around it, is a natural way for us to contribute," CEO Phong Le said in a statement.
Galaxy, a cryptocurrency platform-slash-data center operator, is taking its steps outside the initiative to brace for the quantum threat. Earlier this week, the company unveiled its own Bitcoin Quantum Readiness Initiative, a program including up to $5 million in grant funding for developers working on post-quantum solutions for Bitcoin.
The company has also launched a so-called quantum advisory council to guide the initiative's research and evaluate grant proposals. Its three inaugural members are researchers and professors at universities in the U.S. and Canada.
The threat may be years away, but that milestone is approaching. Shor's algorithm requires a fault-tolerant quantum computer with built-in error correction that is far more reliable than today's noisy machines.
IBM, for one, is targeting the delivery of a large-scale, fault-tolerant machine by 2029. That leaves institutions with years, not decades, to prepare.
The threat isn't guaranteed to play out as expected. Most people will never have access to a quantum machine, so widespread misuse by everyday bad actors isn't the primary concern. But with governments worldwide pouring resources into their respective quantum programs, the risk to national security becomes real.
Just last month, President Donald Trump issued two executive orders on quantum computing. One directive sets a 2031 deadline for federal systems to transition to post-quantum cryptography, or algorithms designed to resist attacks from classical and quantum systems alike.
It is clear that the threat extends beyond Bitcoin. Defending against a danger that is still taking shape is a daunting task, but every step taken today buys the time institutions will need tomorrow.
Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
July 24, 2026 14:28 ET (18:28 GMT)
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