Willy Woo Warns of Q-Day Threat as Bitcoin Lags Gold Valuation

Renowned on-chain analyst and one of Bitcoin’s earliest adopters, Willy Woo, has issued a cautionary note that growing concerns over quantum computing threats are beginning to erode Bitcoin’s competitive edge in long-term valuation when compared to gold.

In a post shared on X on Monday, Woo explained that financial markets are now incorporating the potential dangers associated with a future “Q-Day” event. This term refers to the pivotal moment when quantum computers achieve sufficient power to crack the public key cryptography systems currently in use today.

Woo pointed out that approximately 4 million Bitcoins, often categorized as “lost,” might suddenly become accessible again. These are coins for which private keys are believed to be irretrievable. A sufficiently advanced quantum computer could potentially reverse-engineer private keys from publicly exposed addresses, thereby challenging a fundamental aspect of Bitcoin’s scarcity proposition.

He assessed the probability at around 25% that the Bitcoin network would opt to immobilize these coins through a hard fork. Such a decision remains one of the most divisive topics within Bitcoin’s governance framework.

Q-Day Risk and “Lost” Coins

Blockchain research indicates that these roughly 4 million exposed Bitcoins account for approximately 25% to 30% of the total Bitcoin supply. They reside in addresses where public keys are already visible on the blockchain, positioning them as prime targets in any hypothetical quantum assault.

Nevertheless, implementing measures to freeze these coins would disrupt established principles related to fungibility, immutability, and property rights that have long defined the cryptocurrency ecosystem.

Such an action might create significant rifts within the community. On one side would be proponents of backward-compatible solutions, which maintain existing protocols without nullifying prior transactions or necessitating divisive hard forks. On the other side, advocates might push for more aggressive rule changes to safeguard early holders’ balances.

Given Woo’s estimation of a 75% chance that these coins would remain unfrozen, investors must grapple with a substantial risk. This scenario could reintroduce an amount of BTC comparable to about eight years’ worth of major institutional accumulation back into circulation.

Woo believes this possibility is already manifesting as a built-in discount on Bitcoin’s valuation relative to gold, projected to persist over the coming five to 15 years. Consequently, Bitcoin’s historical pattern of appreciating in terms of gold ounces—a key measure of its store-of-value strength—appears to be faltering.

BTC versus gold chart illustrating price and ratio developments.

Bitcoin’s Path to Post-Quantum Security

Prominent core developers and cryptography experts emphasize that Bitcoin is not confronting an immediate catastrophic threat from quantum computing. Instead, the network has ample opportunity to evolve and implement necessary safeguards.

The proposed strategy for transitioning to post-quantum resilience does not involve a abrupt, single hard fork. Rather, it outlines a gradual, multi-year rollout. This would progressively shift the network toward adopting new address types and enhanced key management protocols.

Even in the event of an unexpectedly rapid quantum advancement leading to the reactivation of those dormant coins, some Bitcoin advocates like Alex Gladstein, chief strategy officer at the Human Rights Foundation, contend that a market flood is improbable. He suggests that a nation-state actor might prefer to quietly accumulate these assets rather than liquidate them en masse.

Quantum Risks Enter Mainstream Macro Discussions

Woo’s alert arrives amid a challenging period for Bitcoin, which is currently trading nearly 50% below its peak value. What was once a specialized worry has evolved into a prominent risk consideration for institutional investment strategies.

Back in January, Christopher Wood, the veteran Greed & Fear strategist at Jefferies, removed Bitcoin from his key model portfolio. He reallocated those funds into gold, directly referencing the emergence of “cryptographically relevant” quantum computers as a factor that undermines Bitcoin’s appeal as a long-term store of value, particularly for conservative investors like pension funds.

This shift underscores how quantum computing concerns are infiltrating broader macroeconomic analyses, prompting portfolio managers to reassess Bitcoin’s position relative to traditional safe-haven assets like gold. As markets continue to digest these developments, the interplay between technological risks and valuation metrics will likely remain a focal point for investors navigating Bitcoin’s future trajectory.