Research has emerged suggesting quantum computers could neutralise the Bitcoin (BTC) blockchain’s cryptographic system with far fewer qubits than previously expected, pushing so-called “quantum risk” back to the forefront of the market.

CoinDesk reported on March 31 that a new paper by Google and California Institute of Technology (Caltech) researchers, among others, has acted as a catalyst to heighten vigilance over the security of Bitcoin and ether (ETH).

The key is that the required scale of qubits has fallen sharply. Google researchers suggested it may be possible to break Bitcoin encryption with a quantum computer using fewer than 500,000 qubits. That is well below the previously cited estimates of “millions of qubits”. Separate research by Caltech and quantum startup Orotomic also claimed a system with about 26,000 qubits could neutralise the encryption standards of Bitcoin and ether in about 10 days.

The findings are fuelling concerns they could shake the foundations of the crypto-asset market. Charles Edwards, founder of Capriole Investments, said that if quantum hacking becomes reality, it could undermine crypto assets’ core premise of “trust the code” and their value proposition as “hard money”. Some analysis also suggests about 25 to 30 percent of total Bitcoin supply could be potentially vulnerable to quantum attacks.

The industry also says the risk is less an immediate reality than a matter of time. Hashib, managing partner at Dragonfly, said attacks at the current stage remain theoretical, but described them as a factor that effectively puts a deadline on the network. He said Bitcoin may need to consider an upgrade to quantum-safe technology around 2029.

Market prices also reflected some of the unease. Bitcoin retreated to around $66,250 after rising above $68,000 in Asian trading hours. CoinDesk said slower demand and rising inflation-adjusted real bond yields are reducing the investment appeal of high-risk and new-technology assets such as Bitcoin.

As the quantum threat gained attention, projects touting “quantum resistance” strengthened. Quantum Resistant Ledger (QRL)’s native token surged about 40 percent in 24 hours to $1.62, and its market capitalisation was tallied at about $127 million. QRL says it aims for a blockchain that is secure even in a quantum-computing environment, and it describes itself as an enterprise-grade platform that has undergone external audits.

The technical difference lies in the signature method. While Bitcoin relies on elliptic curve cryptography (ECC), QRL uses a quantum-safe signature method based on XMSS (eXtended Merkle Signature Scheme). XMSS is cited as a post-quantum cryptography candidate because it uses a one-time signature structure that is difficult to decrypt even with quantum computers.

The key points to watch can be summarised in two parts. One is how much the quantum threat, combined with macro uncertainties such as geopolitical risks, will dampen Bitcoin investor sentiment. The other is whether, as such concerns spread, quantum-resistant projects like QRL could emerge as alternatives and be revalued in the market. Quantum computing remains a theoretical variable, but the market has already started to price its possibility into prices and narratives.