Jefferies has made a decisive shift in its long-term asset allocation, arguing that Bitcoin's role as a store of value is under growing threat and that investors are better off moving back to gold. In its latest GREED & fear report, Jefferies flags the rise of quantum computing as a potentially existential risk to Bitcoin — one that undermines the very foundations on which the cryptocurrency's scarcity and security narrative rests.
The concern centres on cryptographically relevant quantum computers (CRQCs), which could dramatically reduce the time needed to derive private keys from public keys. While such a task would take classical computers trillions of years, quantum machines could theoretically do it in hours or days, exposing large swathes of existing Bitcoin holdings to theft.
Jefferies notes that credible estimates suggest between 20% and 50% of all Bitcoin in circulation could be vulnerable, particularly older 'Satoshi-era' coins, lost coins, and addresses that have been reused multiple times.
A Debate That Cuts to Bitcoin's Core
The report highlights that this is no longer a fringe theoretical discussion. Within the Bitcoin community, there is an active debate on whether quantum-vulnerable coins should be 'burned' pre-emptively to protect the system's integrity, or left untouched — even if that risks future theft. Jefferies describes the latter stance as deeply problematic, quoting one computer scientist who called it a 'suicidal delusion.'
While burning vulnerable coins could, in theory, reduce supply and boost the value of remaining Bitcoin, Jefferies argues that the very need for such measures weakens Bitcoin's claim to be a robust, long-term store of value comparable to gold.
Beyond the long-term technological threat, Jefferies also remains cautious on Bitcoin's near-term market cycle. The brokerage believes Bitcoin likely peaked at around $126,000 in the most recent post-halving rally and sees the current rebound as a countertrend move rather than the start of a new upcycle.
Although Bitcoin has delivered strong returns since Jefferies first added it to its long-term pension portfolio in December 2020, the firm now believes the original investment thesis no longer holds. Bitcoin was introduced as a 'digital alternative to gold' once it became institutionally investable. That assumption, Jefferies says, has been materially weakened.
Gold Reclaims Centre Stage
As a result, Jefferies has removed its entire 10% Bitcoin allocation from its long-term US dollar pension portfolio. Half of that allocation has been redirected to physical gold bullion, with the remaining 5% shifted to gold mining stocks. The revised portfolio now has a combined 70% exposure to gold and gold-related assets.
The rationale is straightforward; gold remains a historically stress-tested store of value, free from technological obsolescence risks. Jefferies also argues that gold is one of the few effective hedges against rising geopolitical tensions and long-term currency debasement — risks it sees intensifying rather than fading.
Jefferies is careful to note that the quantum threat is unlikely to trigger an immediate collapse in Bitcoin prices. However, for investors with multi-decade horizons, such as pension funds, the brokerage believes even a low-probability existential risk is enough to justify exiting. In contrast, gold's value proposition has endured across centuries of political, technological and monetary upheaval.
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