FUD Around Quantum Computing Leads to BlackRock’s Bitcoin ETF Suffering Its Worst Loss in Four Months.

BlackRock’s Bitcoin ETF (IBIT) experienced a sharp 5.3% drop on Monday, its largest single-day decline since August. This occurred as the overheated cryptocurrency market began to cool down, compounded by emerging fears on social media that quantum computing might jeopardize Bitcoin’s security.

The ETF’s price slipped to $54.73, as Bitcoin also faced a 4% drop, dipping below $94,300. The wider market losses were further intensified by the liquidation of overleveraged altcoin positions, contributing to a broader market downturn. While corrections in a bull market are common, the timing of this drop was notable, coinciding with Google’s announcement of its Willow quantum computing chip, which has the ability to solve complex problems in mere minutes—problems that would otherwise take the world’s fastest supercomputers millions of years.

On social media, particularly on X, concerns emerged that Willow could potentially crack Bitcoin’s cryptographic security, specifically its SHA-256 algorithm. The quantum chip’s advancements in qubits, which are more powerful than traditional computer bits, raised alarm. A qubit can exist as both 0 and 1 simultaneously, significantly enhancing a quantum computer’s processing power.

However, experts have downplayed these fears, emphasizing that Willow, with its 105 qubits, is nowhere near powerful enough to compromise Bitcoin’s encryption. “While 105 qubits are impressive for experimental purposes, estimates suggest that at least 1 million high-quality qubits would be necessary to pose a threat to Bitcoin’s security,” explained the pseudonymous analyst Cinemad Producer on X.

Moreover, research from Universal Quantum, in collaboration with the University of Sussex, found that breaking Bitcoin’s encryption would require a quantum computer with approximately 1.9 billion qubits—far beyond Willow’s current capabilities.

Although concerns about quantum computing may have fueled some of the market downturn, the technical charts suggest that the damage may have already been done. IBIT’s price hit a new high last Friday, but the 14-day relative strength index (RSI) showed a bearish divergence, signaling that the rally was losing steam. Monday’s drop confirmed the divergence, indicating the possibility of further declines, with support seen at $51.54, the low from November 26. To reverse the current bearish trend, IBIT would need to rise above $59.16.