Jefferies Financial Group has fully divested its Bitcoin holdings from its flagship long-only pension portfolio, marking a significant reversal for the investment bank as it warns of "existential" threats posed by accelerating advances in quantum computing.

In the latest edition of the widely followed "GREED & fear" report released on January 16, 2026, Jefferies’ Global Head of Equity Strategy, Christopher Wood, disclosed that the firm has removed its entire 10% allocation to Bitcoin. 

The capital has been reallocated into traditional safe-haven assets, split evenly between physical gold and gold-mining equities.

Bitcoin’s ‘Digital Gold’ Narrative Under Fire

The move represents a major shift in institutional sentiment. Wood, who first introduced Bitcoin to the model portfolio in December 2020 at approximately $22,700, cited the emergence of Cryptographically Relevant Quantum Computers (CRQCs) as the primary catalyst for the exit.

While Bitcoin has surged roughly 325% since Jefferies' initial entry, far outperforming gold's 145% gain in the same period, Wood argued that the asset’s "store of value" thesis is fundamentally compromised for long-term investors.

"While GREED & fear does not believe that the quantum issue is about to hit the Bitcoin price dramatically in the near term, the store of value concept is clearly on less solid foundation from the standpoint of a long-term pension portfolio," the report stated.

The Vulnerability Math

The report highlights a growing technical debate within the digital asset community regarding public-key cryptography. Under current classical computing, deriving a private key from a public key is computationally impossible. However, Jefferies warns that quantum machines could potentially achieve this in "hours or days."

Specific institutional vulnerabilities noted in the report include:

• Address Re-use: Public keys exposed during previous transactions.
• Satoshi-era Holdings: An estimated 600,000 to 1.1 million BTC held in P2PK (Pay-to-PublicKey) addresses.
• Total Exposure: Jefferies cites studies suggesting that 20% to 50% of the total Bitcoin supply (4–10 million BTC) could eventually be vulnerable to quantum-level theft.

Strategic Pivot to Physical Assets

The decision to pivot back to gold underscores a growing divergence in institutional risk management. With the removal of the 10% Bitcoin stake, the Jefferies portfolio now maintains a 70% combined exposure to gold and gold-related assets.

The strategist characterized the refusal by some in the crypto community to address these cryptographic vulnerabilities as a "suicidal delusion," suggesting that "burning" of vulnerable coins would undermine the very property rights that institutional investors rely on.

Sources

• Bitget: Jefferies removes 10% bitcoin allocation from simulated portfolio due to quantum computing threats, increases gold holdings instead
• The Tribune: Jefferies' Greed & Fear removes Bitcoin allocation over quantum computing concerns, allocates to gold and silver
• NDTV Profit: Jefferies' Big Call: 'Exit Bitcoin. Enter Gold'
• Business Today: Has Bitcoin peaked? Why Jefferies removed 10% allocation; quantum computing, gold & more
• CryptoSlate: Bitcoin’s “quantum” death sentence is causing a Wall Street rift, but the fix is already hidden in the code
• Whalesbook: Jefferies Dumps Bitcoin for Gold, Cites Quantum Computing Threat

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