BlackRock’s Bitcoin ETF (IBIT) experienced a sharp 5.3% decline on Monday, marking its largest drop since early August. This downturn occurred as the cryptocurrency market cooled off, and concerns about the potential impact of quantum computing on Bitcoin’s security gained traction on social media.
IBIT’s price dropped to $54.73, while Bitcoin also saw a decline, falling over 4% to below $94,300. This market correction was further exacerbated by the liquidation of overleveraged altcoin positions, contributing to broader market losses. While such pullbacks are typical in a bull market, this particular dip attracted attention due to Google’s recent announcement of its Willow quantum computing chip. Willow’s capabilities to solve complex problems in minutes—problems that would take traditional supercomputers millions of years to solve—raised concerns about its potential to crack Bitcoin’s cryptography.
Several social media users expressed fears that Willow’s 105 qubits could break Bitcoin’s SHA-256 encryption. Unlike traditional bits that represent either 0 or 1, qubits can represent both 0 and 1 simultaneously, dramatically increasing the computational power of quantum computers. This leads to concerns that quantum computing could eventually compromise the security of blockchain networks like Bitcoin.
However, experts have largely dismissed these fears, asserting that Willow is nowhere near powerful enough to crack Bitcoin’s security. “While 105 qubits is a significant achievement for quantum computing, it’s nowhere near sufficient to threaten Bitcoin’s encryption,” said the pseudonymous analyst Cinemad Producer on X. “Experts suggest that about 1 million high-quality qubits would be necessary to breach Bitcoin’s encryption.”
A study from Universal Quantum, associated with the University of Sussex, further supports this, concluding that a quantum computer with 1.9 billion qubits would be required to break Bitcoin’s encryption—far beyond Willow’s capabilities.
Despite the unfounded concerns over quantum computing, the market’s response has already taken its toll. IBIT’s technical charts indicated a bearish divergence after hitting new highs on Friday, signaling that the rally might be losing momentum. Monday’s drop reinforced this outlook, suggesting the possibility of further declines, with the next support level at $51.54, the low from November 26. To negate the bearish trend, IBIT would need to break above the $59.16 resistance level.
