This loss of confidence could push prices well below $50,000. At the same time, recent price action suggests institutional demand may be softening, with Bitcoin’s rebound from $85,000 doing little to offset concerns raised by a sharp rise in spot ETF outflows. While some analysts see the pullback as a macro-driven pause rather than a trend reversal, the combination of unresolved quantum security questions and cautious institutional positioning is weighing on sentiment and clouding Bitcoin’s near-term outlook.
Bitcoin Faces Major Quantum Risk
Charles Edwards, founder of quantitative Bitcoin and digital asset fund Capriole, reignited debate around quantum computing and its potential impact on Bitcoin after warning that the cryptocurrency could fall well below $50,000 if it is not made quantum-resistant by 2028. Edwards argues that while the threat of quantum computing has long been treated as a distant or theoretical risk, the timeline may be far shorter than many in the crypto industry expect, and there could be serious market consequences if action is delayed.
Quantum computing is widely seen as a future inflection point for cryptography and digital security. In theory, sufficiently powerful quantum machines could break the encryption schemes that protect private keys, which could potentially expose user funds and sensitive data.
While many critics believe such machines are still decades away from being practical, Edwards believes the crypto industry is underestimating both the pace of development and the market’s sensitivity to perceived security risks. In a post on X, he suggested that only a major market downturn might force the Bitcoin community to take the issue seriously enough to implement the necessary upgrades.
Edwards warned that if Bitcoin has not deployed a viable quantum-resistant solution by 2028, the loss of confidence could trigger a prolonged and severe bear market. He said he expects Bitcoin to trade below $50,000 in that scenario and continue falling until a fix is implemented.
According to Edwards, the network needs to begin rolling out quantum-resistant patches as early as 2026 to avoid a crisis. He framed the issue as less about an immediate hack and more about trust. A key part of Edwards’ argument is that Bitcoin could be an early target for quantum attacks precisely because it cannot reverse transactions.
(Source: Charles Edwards)
Unlike banks and traditional financial institutions, which are already migrating to post-quantum encryption and can block or roll back fraudulent activity, Bitcoin transactions are immutable. This, he argues, makes the network uniquely vulnerable from a confidence standpoint, even if the actual technical threat is still emerging.
Other people in the industry have different perspectives. Bitcoin analyst Willy Woo suggested recently that users could mitigate risk in the interim by holding Bitcoin in SegWit wallets, which may reduce exposure for several years until a solution is deployed. On the opposite end of the spectrum, Bitcoin advocate Michael Saylor dismissed quantum computing fears altogether by describing them as a marketing narrative used to promote quantum-related tokens rather than a genuine near-term threat to Bitcoin.
While consensus on timelines is still elusive, Edwards’ warnings shed some light on a broader concern: even the perception that Bitcoin is unprepared for future technological risks could have profound implications for its price and long-term credibility.
Bitcoin Bounce Fails to Ease Concerns
It seems like investors are already skittish when it comes to putting money into Bitcoin. The crypto king rebounded 3% on Tuesday after briefly selling off to the $85,000 level a day earlier, but signs of weakening institutional demand are raising doubts about the cryptocurrency’s ability to reclaim the $100,000 mark before the end of the year.
BTC’s price action over the past week (Source: CoinMarketCap)
The recovery comes during a rise in outflows from spot Bitcoin exchange-traded funds (ETFs). This could suggest that large investors may be turning more cautious after the recent market volatility.
Data from Farside Investors show that spot Bitcoin ETFs recorded $358 million in net outflows on Monday, which was the largest single-day withdrawal in more than three weeks. The timing of the move fueled speculation that institutional investors are trimming exposure after Bitcoin slipped below the psychologically important $90,000 level. ETF flows have been a key driver of Bitcoin’s upside this year, so sustained outflows are often interpreted as a softening in broader institutional conviction.
Bitcoin ETF flows (Source: Farside Investors)
Bitcoin is also still about 30% below its all-time high of $126,219. The scale of the decline caused some analysts to question whether the bullish phase that carried prices higher through October may be losing momentum.
However, not all analysts see the recent move as a structural shift in market direction. According to analysis shared by X user forcethehabit, Bitcoin’s pullback does not necessarily signal a trend reversal but rather reflects macroeconomic conditions. The commentary points to delayed interest rate cuts and the US Federal Reserve’s decision to keep reducing its balance sheet for longer than many investors had anticipated, both of which have weighed on risk assets more broadly.
The analysis also points out that much of the institutional capital that flowed into Bitcoin this cycle did so via spot ETFs and corporate treasury allocations, rather than through speculative rotation into smaller, higher-risk crypto assets. That rotation, which is often associated with the later stages of a bull market, has yet to materialize. As a result, the current environment may just be cautious positioning rather than an outright exit from the asset class.
