Bitcoin Faces Divergent Signals as Quantum Concerns Meet Historic Gold Undervaluation

Institutional Strategist Exits Bitcoin Over Quantum Threats

Investment bank Jefferies has made waves in the cryptocurrency community after its longtime "Greed & Fear" strategist Christopher Wood eliminated Bitcoin from his flagship model portfolio, replacing the 10% allocation he established in late 2020 with physical gold and gold mining stocks ^[1].

According to Wood's latest newsletter, the decision stems from mounting concerns that quantum computing advances may compromise Bitcoin's long-term security credentials. He specifically warned that "cryptographically relevant" machines arriving sooner than expected could enable attackers to derive private keys from exposed public keys, potentially undermining the cryptography that secures Bitcoin balances and mining rewards ^[1].

The strategist argued this quantum risk threatens Bitcoin's position as a dependable store of value for pension-style investors, noting that concern over compressed quantum timelines is growing among long-term institutional capital allocators ^[1].

Developers Dismiss Immediate Threat

Bitcoin infrastructure builders have pushed back against characterizations of quantum computing as an urgent danger. Blockstream CEO Adam Back has repeatedly maintained that breaking Bitcoin's current signature schemes remains likely 20 to 40 years away, providing ample time for the network to migrate to post-quantum signature algorithms and enhanced key management practices ^[1].

Research from a16z similarly concluded that the probability of a "cryptographically relevant" quantum computer capable of breaking current public key systems emerging this decade remains low, with analysts suggesting that implementation bugs, governance issues, and "harvest now, decrypt later" attacks on encrypted data pose more immediate risks than attacks on live blockchain signatures ^[1].

Record Undervaluation Against Gold Signals Potential Rally

While quantum concerns dominate institutional conversations, technical analysis presents a starkly different picture. Bitcoin entered record undervaluation territory against gold on Friday, with the BTC-XAU ratio's Z-score dropping below negative two for the first time, indicating Bitcoin trades more than two standard deviations below its historical norm compared to gold ^[2].

Historically, such extreme undervaluation has preceded significant Bitcoin rallies. A similar signal in November 2022 preceded a roughly 150% BTC price increase over the following year, while a March 2020 reading preceded gains exceeding 1,170% ^[2].

"Everything points to Bitcoin massively outperforming Gold over the coming months," said Julius, the analyst who developed the BTC/Gold Power-Law bands and Z-score oscillator ^[2].

Historical data suggests Bitcoin's strongest price expansions typically follow gold bull markets, with BTC beginning parabolic phases only after gold moves decisively above its long-term trend. This lag has ranged from approximately two months to over a year in previous cycles ^[2]. Multiple analysts now project BTC could reach $200,000 to $300,000 by year's end, provided historical patterns hold ^[2].

Bear Market Warnings Persist

CryptoQuant research has issued cautionary notes, warning that Bitcoin's current position below its 365-day moving average at $101,000 suggests the cryptocurrency remains in bear market territory despite a 21% rebound since November lows ^[3].

The analytics platform drew parallels to 2022, when Bitcoin declined 27% after crossing below its 365-day moving average, rallied 47%, and was subsequently rejected at that same technical level ^[3].

Adding to bearish signals, total Bitcoin flowing into exchanges reached a seven-day average of 39,000 BTC, the largest inflow volume since November 25, 2025. Higher exchange inflows typically indicate escalating selling pressure ahead ^[3].

"Fundamental and technical indicators still point out that we remain in a bear market," CryptoQuant concluded in its weekly report ^[3].

The divergent signals underscore the complexity facing Bitcoin investors as technological concerns compete with historically bullish technical setups in shaping the cryptocurrency's near-term outlook.