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Is Crypto’s Quantum Threat Three Years Away?

Is Crypto’s Quantum Threat Three Years Away?

Plus: 😞 Bitcoin’s worst Q1 since 2018, 🤑 CoinShares lists on Nasdaq, 🤚 For the first time, STRC’s dividend stays flat

Laura Shin
April 01, 2026

Hi! In today’s edition:

🔬 Google published a whitepaper showing quantum computers may be able to crack Bitcoin and Ethereum wallet encryption with as few as 500,000 physical qubits — a roughly 20-fold reduction from prior estimates — and a companion Caltech/Oratomic paper pushes that threshold even lower, to around 10,000 qubits
📉 Bitcoin closed Q1 2026 down approximately 23%, its third-worst opening quarter since 2013, as the U.S.-Iran conflict, elevated oil prices, and a frozen Fed kept sentiment in extreme fear
💰 CoinShares lists on Nasdaq, Europe's largest digital asset manager, under the ticker CSHR, completing its $1.2 billion SPAC merger
😐 Strategy's perpetual preferred stock, Stretch (STRC), will maintain its 11.5% annualized dividend for April — the first month without an increase since the product launched

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Google Quantum Paper Compresses the Timeline for Crypto's Existential Risk

Google's Quantum AI team published a whitepaper on Tuesday warning that the computing resources needed to break the elliptic curve cryptography underpinning most blockchains may be roughly 20 times smaller than prior estimates. The paper puts the threshold at fewer than 500,000 physical qubits, down from estimates that previously ran into the millions.

A companion paper from Caltech and quantum startup Oratomic went further, arguing a neutral-atom system with around 26,000 qubits could crack the encryption standard securing Bitcoin and Ethereum wallets in about 10 days, while a rapid "on-spend" attack intercepting a live transaction could be completed in roughly nine minutes under Google's model.

The findings put an estimated 6.9 million BTC — roughly one-third of all circulating supply — at heightened risk, particularly coins in early wallet formats and those exposed by Bitcoin's Taproot upgrade, which makes public keys visible by default. Google has set an internal 2029 deadline — just three years away — for migrating its own systems to post-quantum cryptography and urged blockchain communities to accelerate the same transition.

Ethereum developers have already launched a post-quantum migration effort. Bitcoin's path is less clear, with advocates calling for faster development of proposals like BIP 360. The papers stop short of predicting an imminent attack; the required hardware does not yet exist. But the margin for error, Google warned, is "increasingly narrow."

Check out Laura’s interview from Tuesday with Dolev Bluvstein, CEO of Oratomic, and Alex Pruden, Co-Founder & CEO, Project Eleven, about the two big breakthroughs — and what they mean for crypto on X (starting at 58:10) and YouTube.

Bitcoin Closes Q1 Down 23% — Its Worst Opening Quarter Since 2018

Bitcoin ended Q1 2026 down approximately 23%, its third-worst opening quarter since 2013 and the worst since the bear market of 2018, when it fell nearly 50% in the same period. BTC opened the year near $87,500 and closed Tuesday around $66,700, having shed over $20,000 per coin over three months.

The decline was driven by compounding macro pressure: the U.S.-Iran conflict tightening risk appetite, WTI crude above $100, the Federal Reserve holding rates at 3.5%–3.75% with no near-term cut expected, and sustained outflows from Bitcoin ETFs. Ethereum fared worse, closing Q1 down roughly 32%.

Alternative.me’s Crypto Fear & Greed Index closed the quarter near 11, near its most extreme fear reading in 18 months. Analysts at Risk Dimensions noted that Bitcoin's nearly six-month stretch of underperformance relative to U.S. equities has no recorded precedent — raising fresh questions about whether the asset is acting more like a risk trade than an inflation hedge.

CoinShares Debuts on Nasdaq as Europe's Largest Crypto Asset Manager Goes Public

CoinShares, Europe's largest digital asset manager, began trading on the Nasdaq on Wednesday under the ticker CSHR, completing a $1.2 billion SPAC merger with Vine Hill Capital Investment Corp. that was first announced in September. The deal closed late Tuesday and brings $50 million in fresh institutional capital anchored by hedge fund Alyeska Master Fund.

The Jersey-based firm manages approximately $6–7 billion in assets, holds a 34% market share in European digital asset ETPs, and ranks fourth globally among crypto ETP managers behind BlackRock, Grayscale, and Fidelity. It has been profitable every year since its founding in 2014 — through bull markets and bear markets alike. Previously listed on Nasdaq Stockholm, the U.S. listing is a deliberate bid for American capital and distribution.

CEO and co-founder Jean-Marie Mognetti was direct about the ambition: "We have a lot of AUM in Europe, we don't have much in the U.S." He added that the company is "diversifying both our product and revenue mix, including new capabilities in listed asset management, active alternative strategies, and decentralized finance."

The listing values CoinShares at a notable discount to peers — 7.3x EV/EBITDA versus an industry average of 20.9x — a point that may attract value-oriented institutional investors now that the stock is accessible on U.S. exchanges.

Strategy Holds STRC Dividend Steady at 11.5% — First Pause After Seven Straight Increases

Strategy's perpetual preferred stock, Stretch (STRC), will maintain its 11.5% annualized dividend for April — the first month without an increase since the product launched in July 2025 at a 9% yield. The company was able to hold the rate flat after STRC's 30-day volume-weighted average price landed at $99.95, just close enough to its $100 par value to remove the need for another hike. STRC took 12 days to recover back to par following the March ex-dividend date, and is expected to trade near par through the April 14 ex-dividend date.

The product works by adjusting its monthly dividend to steer the share price: when STRC trades below par, Strategy raises the yield to attract buyers; when it's near par, the company can hold or cut. Keeping the price anchored to $100 lets Strategy issue new shares through its at-the-market program and deploy the proceeds to buy more bitcoin.

In a notable parallel, rival bitcoin treasury firm Strive's perpetual preferred stock, SATA, reached $100 par for the first time, enabling it to begin issuing shares through its own ATM program. SATA currently offers a higher dividend rate of 12.7%, competing directly with STRC for the same pool of income-seeking institutional capital.

Uneasy Money

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🎉 Franklin Templeton agrees to buy CoinFund spinoff 250 Digital, led by Chris Perkins (a Bits + Bips cohost) and Seth Ginns.
🏦 Federal Reserve Governor Michael Barr warned that stablecoins still pose serious risks to the U.S. financial system even after the GENIUS Act, cautioning that issuers have an incentive to reach for yield by holding riskier reserve assets and that gaps in inter-agency coordination could allow systemic risks to slip through.
⚛️ The clearest immediate winners of the Google quantum computing paper were post-quantum crypto tokens, with Quantum Resistant Ledger (QRL) and Cellframe each surging around 50% and the broader basket of 20 quantum-resistant coins gaining 8% to a combined market cap of $4.66 billion. Zcash, which is not fully post-quantum but uses advanced zero-knowledge proofs, added nearly 7%.
🕵️ The DOJ charged 10 foreign nationals from four crypto market-making firms — Gotbit, Vortex, Contrarian, and Antier — with wire fraud and conspiracy for running wash-trading schemes that artificially inflated token prices and volumes before insiders sold into the market.

🏦 Investment bank Benchmark initiated coverage of Securitize with a Buy rating and a $16 price target, calling the BlackRock-backed tokenization firm a "compelling pure-play investment on tokenization" and a picks-and-shovels play on Wall Street's migration to blockchain rails.

📈 Keyrock, a Belgium-based crypto market-making firm, hit a $1.1 billion valuation in a Series C round led by Standard Chartered's venture arm SC Ventures, with Ripple also participating. Funds will go toward balance sheet expansion, new products, and acquisitions.
💧 Midas raised $50 million in a Series A round led by RRE and Creandum, with backing from Coinbase Ventures and Franklin Templeton, to build instant redemption infrastructure for tokenized assets — fixing the days-long withdrawal delays that have hampered onchain fund adoption.
🌐 OpenFX, a two-year-old stablecoin-based cross-border payments infrastructure startup, raised $94 million in a Series A led by Accel, Atomico, Lightspeed Faction, Pantera, and others. The company uses stablecoins as a settlement rail between fiat currencies.

Enter Bitcoin Capital Markets