Operational Risk Considerations of Quantum Computing and Crypto
Generally, I try to stay in my lane when it comes to writing about subjects that go beyond my professional experience. However, a number of colleagues in both traditional investment management and digital assets have reached out to me over recent months asking for thoughts on quantum computing’s impact on crypto.
The originators of the inquiries have fallen into two groups:
- Crypto fund managers who are looking for ways to respond to investors, and potential allocators, due diligence on how the manager is implementing any changes to current operations (via investment or business impacts); with outreach coming from either the manager’s staff, or in some instances, the directors of crypto fund boards.
- Institutional allocators looking to Crypto Insights Group to provide an “industry view” on quantum computing’s potential risks to crypto operations.
Although Crypto Insights Group has been tracking the news, events and consensus related to quantum computing’s risk for some time, the pick-up in frequency of the questions, and indeed, the concerns of the subject matter, led us to conduct internal research to understand and consider the practical implications for how we conduct our own due diligence. The findings of which, are provided here.
Quantum Risk of Crypto Investments
As has been well documented, the current consensus amongst experts in both the quantum computing and crypto space do not believe current quantum technology and systems are able to pose an immediate threat to blockchain infrastructure. However, the proverbial clock is ticking.
In March of this year, researchers at Google released a paper (link here) presenting estimates of how, and a potential time frame as to when, Shor’s algorithm, a prime numbers-based math that is used in most cryptography to encrypt and protect data, can be broken.
The paper worked through vulnerabilities specific to Bitcoin (address types, mempool exposure, key reuse), Ethereum (account model, smart contract admin keys, Proof-of-Stake validators, and Data Availability Sampling), and a range of other blockchains and cryptographic primitives (BLS signatures, zkSNARKs, privacy protocols like Zcash and Monero, stablecoins, and RWA tokenization), while also crediting real-world post-quantum migration efforts by projects like QRL, Algorand, and Solana.
In response, Coinbase also authored their own research (link here) in April, which concluded that although an eventual large-scale quantum computer that is fault tolerant, meaning it will be less prone to quantum errors or “noise,” will be functional, the current state of quantum compute is unable to operate fast enough to break Shor’s algorithm and existing cryptography, by specifically brute-forcing crypto keys (i.e., it would take a timescale of eons).
However, the paper did warn blockchains, or their governance functions, should start making preparations now without weakening current security or incurring unnecessary costs. The report reviews specific migration plans across the largest blockchain networks such as Bitcoin, Ethereum, Solana, Algorand, Sui, and Aptos, and highlights a policy dilemma facing every chain: whether to set a "flag day" that revokes quantum-vulnerable dormant assets (i.e., "Satoshi’s coins") or leave them exposed indefinitely. Simply put, if you don’t eventually update your wallet software, you are on your own.
To be direct, and using two of the biggest chains as examples, there has been a good amount of debate, and frankly consternation, amongst the Bitcoin camp about the path forward and timing of new software implementations with respect to updating for quantum defense; while the Ethereum Foundation has taken a more proactive approach by creating a post-quantum security team to start the updating process (link here).
Tracking the quantum-risk subject from late 2025 and into 2026, Crypto Insights Group, within its monthly proprietary survey, polled the survey participants of crypto managers in December 2025, and again in April 2026, on the matter of quantum computing posing a credible risk to Bitcoin’s cryptography.
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The survey question and its results clearly showed that in a matter of months a dramatic rise occurred in the view, and likely concern, that most managers no longer considered the risk to Bitcoin as being in the order of a “More than 5 years,” but rather the risk being moved up to a time horizon of “Within 2- 5 years.”
In response to this, the team at Crypto Insights Group recommended to both crypto fund managers, and their allocators, to exchange clear information about understanding the blockchains (or protocol tokens) traded within a portfolio, where a manager can clearly answer the following questions:
- Which blockchains are held, directly or indirectly, within the portfolio under review?
- What is the manager’s understanding of how each chain, or layer above it, is addressing the future state for which quantum computers and software pose an immediate threat?
- How would the manager adjust or de-risk a portfolio if they believed an underlying investment was not prepared to respond to quantum-related risks?
Quantum Risk to Business Operations
Taking a step back from investment risk, and therefore assessing the risk to a fund manager’s operations, the Crypto Insights Group team also considered the business impact of quantum computing.
From such a perspective, we arrived at two areas of critical importance that also had quantum-threat exposure: critical internal infrastructure (i.e., systems and storage) and service provider dependencies.
For critical infrastructure, reliance on cloud computing for data management is an essential part of a fund manager’s operations (be it digital assets or traditional asset managers). When considering the operations of a crypto manager, nearly all crypto teams, which Crypto Insights Group team has either diligenced or allocated to, run their portfolio management, trading models, risk management, and often market execution, through the efficiency afforded by cloud computing. As such, another critical due diligence question for an allocator to ask, and a manager to have a prepared response for, is:
- Has the manager reached out to their server storage providers to assess the risk (and fiduciary requirement) of protecting information related to proprietary software/models and their execution?
Extending beyond the internal functions detailed above, and with respect to investor data, Crypto Insights Group has also suggested managers reach out to their service providers who keep clients’ personal and investment information, such as a custodian or exchange, fund administrator and other outsourced functions to ask the following:
- How is the service provider implementing safeguards around the protection of customer data with respect to quantum computing? If so, please provide details.
In addition, a manager should request a vendor's third-party operational control audits (i.e., SOC or ISAE reports), which can inform details on operational controls and any failed tests with protecting client data.
A Proactive Approach to Quantum Risks
There are third-party providers that attempt to map this out with countdowns until "Q-Day," which may be something to consider with respect to tracking quantum computing's risk to crypto.
https://isitqday.com/, provides information on pending proposals and consensus by certain blockchains on the matter of quantum computing risk. The bottom of the website also details which cloud providers have already implemented quantum-safe features, presenting an efficient way for both a fund manager and allocator to track the areas Crypto Insights Group considers to be of highest risk.
The Crypto Insights Group team is pragmatic about the level of expertise most may have with respect to the complexities of quantum computing. This is why we advocate for, practice, and recommend crypto investment participants not only continue to educate themselves on the subject, but create, as demonstrated above, pertinent questions (for investors) and thoughtful responses (for fund managers), on the evolving subject of quantum risk.
However, sitting at the intersection of hundreds of institutional crypto strategies and their investors, Crypto Insights Group has developed the tools, benchmarking, analysis and due diligence expertise necessary to address new and emerging risks to digital assets, by being a premiere source of research and guidance for facilitating best practices, standards and market knowledge.
Reach out to learn more on how Crypto Insights Group can help support your crypto counterparty processes, standards and risk management.
