An on‑chain analyst argues that the looming arrival of powerful quantum computers may trigger one of the most disruptive moments in Bitcoin’s history. Not because quantum hardware is suddenly able to break Bitcoin’s cryptography today, but because of how the network might respond (or fail to respond) to the threat.

Threat #1: Dormant Bitcoin supply at risk

A key point in the article is that a large portion of Bitcoin’s supply lies in wallets that have not moved for years. According to one data source cited, about 32.4 % of all Bitcoin hasn’t moved in over five years, and about 16.8 % has been dormant for more than a decade.

Why is that relevant? These unmoved coins are often assumed to be “lost”, though not always—some might simply be long‑term holdings or cold wallets. The analyst, James Check of Checkonchain, argues that these coins are the first potential targets in a quantum attack scenario, because many of them use older address formats and signature schemes which might be more exposed.

Threat #2: Cryptography vulnerability

The article identifies that Bitcoin currently uses elliptic‑curve digital signature algorithms (ECDSA) and Schnorr signatures. These rely on locked‑in algorithms that could theoretically be broken by sufficiently powerful quantum computers using, for example, Shor’s algorithm.

It’s noted that the National Institute of Standards and Technology (NIST) has already approved several quantum‑resistant signature schemes, and that the Bitcoin community has proposals (such as BIP 360) to adopt post‑quantum cryptography. But moving from proposal to consensus to deployment is non‑trivial in a decentralized network like Bitcoin.

Political/governance risk over purely technical risk

The article argues that the more acute risk isn’t necessarily “quantum hardware tomorrow breaks Bitcoin” but rather the governance and coordination challenge of how to deal with the switch to quantum‑resistant protocols, especially when old coins are involved. If coins migrate to quantum‑resistant addresses, fine. But if a large amount of Bitcoins remain in older address formats, those coins potentially become vulnerable (if quantum attacks arrive).

One quote:

“Actually, I think a lot of confusion on quantum and BTC is that everyone frames it as a tech problem, but what makes the problem specifically unique to BTC is that the tech problem is secondary.”

In short, the article frames this as a “political” / consensus / transition risk more than an immediate technical collapse.

Timeline and technical feasibility

The article provides estimates of how many qubits might be required for an attack. For instance, one estimate suggests that on the order of 126,000 physical qubits might be required to break elliptic‐curve signatures securing Bitcoin wallets. Another posits that 2,300 logical qubits might suffice under certain conditions.

However, not all experts agree the threat is near‑term. For example, Adam Back, CEO of Blockstream, is quoted as saying the quantum threat to Bitcoin is at least 20–40 years away, because today’s machines are noisy and need extensive error correction.

Strategic implications for Bitcoin holders & ecosystem

What does this article mean for someone holding Bitcoin, or for ecosystem watchers? A few key takeaways:

1. If you are holding Bitcoin in long‐term static addresses (especially older address types which expose public keys once redeemed), there is a future risk (though not necessarily immediate) that those coins are more “vulnerable” than ones you migrate to quantum‑safe addresses.
2. The Bitcoin ecosystem will need to coordinate a migration (or upgrade) to quantum‑resistant cryptography, which includes both technical (algorithm selection, wallet implementations) and governance coordination (how to treat old addresses, how to migrate coins, whether to freeze some addresses, etc).
3. There may be “first mover” opportunity or risk around large dormant wallets. If quantum‑capable adversaries begin harvesting public keys from blockchain data now (a “store now, attack later” strategy) then long‑inactive addresses could be tempting targets.
4. The horizon remains uncertain: whether we talk about late 2020s, 2030s, or even 2040s depends on assumptions about quantum hardware progress. But the article makes clear the discussion is increasingly serious among institutional actors. For example, the Government of El Salvador (cited in the article) split its Bitcoin holdings across many addresses explicitly citing quantum risk.

My additional perspective and commentary

From my vantage point the article is valuable, but there are nuances worth emphasizing. First, despite the attention, no known quantum computer today can actually break Bitcoin’s signature scheme in the wild. The estimates of qubit counts are large and assume many breakthroughs in error correction and scaling. So the threat is realistic, but not imminent in the sense of “tomorrow your coins vanish”.

Second, the transition to quantum‑resistant cryptography is easier said than done. In Bitcoin’s case, the network must agree on the changes (via BIPs, deployment, miner/node support) and then wallets/exchanges must roll out support without fracturing the ecosystem. The article correctly frames the governance as the bottleneck.

Third, for holders my advice is conservative: maintain strong security practices, monitor whether your wallet provider or service supports quantum‑resistant schemes (or has migration plans). If you hold coins in cold storage in older address formats and you’re planning to hold for decades, then this topic should at least be on your radar.

Finally, this story intersects with AI: the article mentions that advances in AI‑driven quantum‐algorithm research could accelerate the timeline (for example, discovering more efficient quantum attack algorithms). So it’s not just hardware; software breakthroughs matter.

In a decisive shift within institutional finance, major funds have quietly trimmed roughly $5.4 billion in holdings of StrategyB (MicroStrategy) (ticker: MSTR) during the third quarter of 2025. What once served as a convenient equity‑based route to Bitcoin exposure is now being sidelined as direct crypto access becomes more efficient and regulated. According to aggregated filings, institutional paper value in MSTR dropped from approximately $36.3 billion to $30.9 billion—a decline of about 14.8 percent.

The Rise of the Proxy Trade

MicroStrategy transformed from enterprise software company into the de‑facto “shadow Bitcoin ETF” when its leadership embraced Bitcoin accumulation in 2020 under Michael Saylor. Because many institutional allocators were constrained from buying the digital asset outright, MSTR offered a regulated, listed vehicle whose fortunes moved in tandem with Bitcoin’s. At its peak, the stock traded at nearly twice the value of its net Bitcoin holdings per share, reflecting a scarcity premium and strong demand for indirect crypto exposure.

A Quiet Unwind in Q3

Despite Bitcoin trading relatively steadily through Q3—hovering near $95,000 and even touching a new all‑time high above $125,000—the reduction in MSTR holdings cannot be attributed to market stress or forced liquidations. The evidence points to a conscious decision by institutions to scale back this proxy. As many as dozen large managers, including Vanguard, BlackRock and Fidelity, pulled back more than a billion dollars each from MSTR. This is not a collapse, but a measurable pivot in strategy.

Why Now? The Growing Use of Spot Bitcoin and ETFs

The timing of this shift mirrors the maturing institutional environment around Bitcoin access. With spot Bitcoin ETFs and other regulated custodial solutions gaining momentum, many large portfolios no longer require an equity wrapper to gain crypto exposure. The original appeal of MSTR—liquid, listed, and regulatory friendly—has eroded. Its role is evolving from essential access point to one of several optional strategic vehicles.

Implications for MicroStrategy and Its Investors

MicroStrategy remains a massive player, with more than $30 billion still held in institutional exposure. However, the era in which it stood as the sole efficient gateway to Bitcoin on Wall Street is over. Going forward, the risks inherent in its structure—corporate leverage, equity dilution, dependency on Bitcoin performance—will carry greater weight. Investors seeking pure Bitcoin exposure may increasingly bypass the corporate overlay and go directly into crypto or spot ETFs. For those who stay with MSTR, the strategy may warrant reclassification: from broad crypto proxy to tactical instrument with corporate‑wrapped risks.

What to Monitor Going Forward

A few key timelines and metrics will help clarify how this shift plays out. First, Q4 filings will signal whether institutions continue to reduce exposure, hold steady, or begin re‑investing in MSTR. Second, Bitcoin’s performance will matter: a sustained rally above $100,000 may reinforce MSTR’s appeal, whereas a drop toward $80,000 will test corporate wrapper risk in sharper relief. Finally, broader adoption of regulated crypto vehicles will determine if proxies like MSTR become niche or mainstream strategic options.

In sum, the unwind of MSTR holdings marks an institutional inflection point. It signals greater confidence in direct Bitcoin access and highlights the evolving nature of crypto integration within mainstream finance.

The Billionaire’s Crypto Fear

Ray Dalio, founder of Bridgewater Associates and long-time student of systemic risk, has never been one to make casual predictions. So when he warned this month that Bitcoin could be broken by quantum computing, the crypto world listened. Not because it was a new idea—but because of who was saying it.

In recent interviews, Dalio acknowledged that he still owns Bitcoin, but voiced growing concerns over the security of public-key cryptography. According to him, the rise of quantum computing may eventually compromise Bitcoin’s foundational encryption—exposing wallets, breaking signatures, and rendering the entire network vulnerable. For long-term holders and institutions alike, that represents a serious existential threat.

And yet, Dalio’s caution is not just about fear. It’s a pivot point.

Quantum Threats and the Cryptographic Core

Bitcoin, like most legacy cryptocurrencies, relies on elliptic curve cryptography (ECC) to generate private/public key pairs and sign transactions. In classical computing, ECC is robust. But in the world of quantum machines—particularly with Shor’s algorithm on sufficiently advanced hardware—those same protections could be undone.

The industry knows this. But knowing and acting are different things. While some projects continue to rely on traditional methods, others have begun preparing for a post-quantum future.

Enter Zcash.

Zcash: Built for Privacy, Braced for Quantum

Zcash is best known for its privacy-preserving zero-knowledge proofs, specifically zk-SNARKs. But what makes Zcash especially relevant now is its forward-looking cryptographic design.

While Zcash currently uses similar ECC primitives as Bitcoin for some of its operations, the project has long maintained a more agile approach to upgrading its cryptographic stack. In fact, the Zcash Foundation and Electric Coin Company have already explored and discussed migrating to post-quantum cryptographic algorithms when the time comes.

What sets Zcash apart isn’t that it’s already quantum-proof—because it isn’t, not yet—but that its architecture and development community are actively planning for that scenario. The shift from ECC to lattice-based or hash-based cryptography is part of its roadmap discussions. In 2022, ECC lead cryptographer Daira Hopwood even published early research on integrating post-quantum secure primitives into shielded transactions.

In other words, Zcash is ahead of the curve.

The Strategic Shift: From Store of Value to Store of Secrecy

Dalio’s remarks bring a deeper truth into focus. Bitcoin’s dominance is tied to its narrative as “digital gold” — a decentralized, scarce, and censorship-resistant store of value. But if that gold becomes vulnerable to quantum “pickpockets,” then its edge weakens.

Zcash represents a different bet: privacy, adaptability, and cryptographic agility. If the next era of crypto prioritizes secrecy, survivability and forward-compatibility, then assets like Zcash could move from the fringe into the core.

We’re not there yet. Bitcoin remains dominant, and quantum computing, while rapidly advancing, is not yet at the level required to break ECC in the wild. But for Dalio—and for other macro thinkers—this isn’t about when the threat arrives. It’s about who’s ready when it does.

Conclusion

Ray Dalio’s warning is more than a theoretical caution. It’s a spotlight on the unspoken weakness of crypto’s foundational layer. Zcash, with its cryptographic culture and forward-leaning roadmap, may not be the first name in headlines, but it may be one of the best-positioned for a quantum-inflected future.

The age of crypto resilience isn’t coming. It’s already here. And it might wear a zero-knowledge cloak.