Bitcoin faces quantum threat exposing 35% of supply by 2030

Quantum computers could break Bitcoin's encryption by 2030, putting roughly 7 million BTC — 35% of supply — at risk of theft.

Bitcoin faces a systemic security threat from quantum computing that could expose roughly 7 million coins, or 35% of total supply, by decade's end.

"Preparing the network would require developers to introduce quantum resistant signature schemes and users to move funds into protected addresses," Galaxy Research head Alex Thorn said. "Galaxy's role is to bridge that gap through research that makes the threat legible to investors and policymakers."

Project Eleven, a quantum security firm, concluded in a May report that a cryptographically relevant quantum computer is more likely than not to exist by 2033 and potentially as early as 2030. Google has projected encryption risks to Bitcoin as early as 2029. Galaxy Digital committed as much as $5 million in developer grants, a research program, and a Quantum Advisory Council to fund post-quantum cryptographic solutions. The Nasdaq-listed firm said it expects to begin accepting grant applications immediately.

The threat centers on Shor's algorithm, which could derive a private key from an exposed public key, allowing an attacker to drain wallets without on-chain detection. Old and reused addresses are most at risk. Any upgrade to quantum-resistant signatures would require years of coordination across Bitcoin's decentralized governance, making the timeline for action shorter than it appears.

$420M in vulnerable supply demands urgent action

The 7 million BTC at risk includes coins in pay-to-public-key outputs where the public key is written directly onchain, and addresses that have already spent from — exposing their public keys. Roughly 1.1 million BTC attributed to pseudonymous creator Satoshi Nakamoto sits in the most vulnerable category, mined before hierarchical deterministic wallets existed. More than 34% of all bitcoin sits in addresses whose public keys have been exposed, according to BIP-361.

Coinbase's quantum advisory council in June urged developers to begin migration work rather than debate timing, pegging vulnerable supply at about 7 million BTC. President Donald Trump signed two executive orders the same month, moving the federal deadline for post-quantum cryptography to December 2031. The orders require federal agencies and contractors to migrate to quantum-resistant encryption for key establishment by the end of 2030 and for digital signatures by the end of 2031.

A recovery path emerges, but not for Satoshi's coins

Project Eleven in July unveiled a zero-knowledge proof system that lets wallet owners prove control through key derivation rather than signatures — a fallback after Q-Day. The prototype generates a proof in 243 milliseconds on an M5 MacBook Air, with verification taking 40 milliseconds, according to the firm. That is roughly 60 times faster than prior work. But it remains unaudited, supports only three Bitcoin address types rather than Taproot, and cannot recover coins from pre-2012 wallets — including all of Satoshi's holdings.

BIP-361, published in April by Jameson Lopp and five co-authors, proposed freezing quantum-vulnerable coins after a transition period, blocking new deposits to vulnerable addresses after three years and freezing whatever remained after five. The loudest objection to that plan has been that freezing coins breaks Bitcoin's promise of permanent ownership. Project Eleven's recovery proof changes the argument: a freeze becomes a lock rather than a burn, but only for users who still hold their seed phrase. Satoshi never had one.

The implications for Bitcoin holders are immediate. Anyone with coins in reused or pay-to-public-key addresses should consider migrating funds to quantum-resistant addresses before Q-Day arrives. Defenses under discussion include adopting new signature schemes through proposals such as BIP-360 and BIP-361, though such upgrades could take years given Bitcoin's decentralized governance. Galaxy's initiative aims to accelerate that timeline by funding developers working on post-quantum solutions.

Galaxy's Quantum Advisory Council includes University of Calgary professor Barry Sanders, MIT Sea Grant Knauss Fellow Damien Bérubé, and Boston University computer science professor Eran Tromer. Founder and CEO Mike Novogratz said the firm believes it is important to "help be part of the solution to any potential threat quantum computing poses to Bitcoin."

This article is for informational purposes only and does not constitute investment advice.