BlackRock Flags Quantum Threat to $BTC and $ETH — 35% of Bitcoin Supply May Be Exposed

BlackRock published a report this week warning that quantum computing poses a long-term cryptographic risk to $BTC and $ETH, putting institutional weight behind a debate the industry has largely treated as theoretical. The firm's team — Robert Mitchnick, Head of Digital Assets; Will Su, Head of Digital Assets Research; and Inish Crisson, a senior software engineer in the Aladdin Digital Assets Lab — concluded the risk is manageable, but only if blockchains move fast enough. At press time, $BTC traded at $62,629.

What Actually Breaks — and What Doesn't

The attack surface is narrower than headlines suggest. Bitcoin's SHA-256 proof-of-work hash function is "largely considered quantum-resistant," with Grover's algorithm delivering only a quadratic speedup that the network's difficulty adjustment can absorb. The real vulnerability sits in digital signatures: both $BTC and $ETH rely on elliptic curve cryptography to prove key ownership, and a future machine running Shor's Algorithm could reduce a problem requiring millions to billions of years on classical hardware to something tractable in days or minutes.

BlackRock cites Google's decision to move its post-quantum migration deadline to 2029 and IBM's target of large-scale fault-tolerant quantum computing between 2029 and 2033 as evidence that timelines are tightening — even if no Cryptographically Relevant Quantum Computer exists today.

35% of $BTC Supply and the Satoshi Problem

The headline exposure figure is roughly 7 million $BTC — about 35% of circulating supply — that the report flags as vulnerable because public keys have already been revealed on-chain. That breaks down as 1.9 million BTC in address types exposing unhashed public keys and 5 million BTC in reused addresses where prior transactions disclosed public keys while unspent outputs remain.

Layered on top is the lost-coin question. Using Chainalysis estimates, the report notes 2.3 million to 3.7 million BTC — 11% to 19% of circulating supply — may be permanently inaccessible, including roughly 1.1 million BTC in P2PK addresses widely attributed to Satoshi Nakamoto. Any post-quantum migration that sets a hard deadline for moving vulnerable coins forces an uncomfortable community vote on what happens to wallets no one can reach.

$ETH Has a Roadmap; $BTC Has a Harder Social Problem

$ETH faces more technical moving parts. Vitalik Buterin identified four quantum-vulnerable areas in early 2026: BLS signatures in the consensus layer, KZG proofs in the data layer, externally owned account signatures, and zero-knowledge proofs at the application layer. Ethereum's "L1 Strawmap" outlines seven network updates and hard forks between 2026 and 2029, five of which target quantum vulnerabilities directly — including post-quantum signature precompiles, validator keys, hash-based consensus signatures, and a longer-term shift from KZG commitments toward STARK-based verification.

For Bitcoin, the technical lift of replacing a signature algorithm is comparatively narrow. The harder problem is governance: the network is built to resist rapid or centralized change, and reaching consensus on post-quantum cryptography across a decentralized ecosystem is, the report notes, likely a multi-year endeavor.

BlackRock's Measured Read

The report stops well short of calling quantum a live threat. BlackRock frames it as one of the few remaining "walls of worry" for digital assets and argues that successful post-quantum migration could strengthen the sector over time. The firm's bottom line: upgrading existing cryptographic systems to a quantum-secure standard is, by a considerable margin, less daunting than building the machine that would break them.