CNBC Mad Money host Jim Cramer is selling his Bitcoin (BTC -0.02%), but not for the reason you might think. He’s not dumping crypto for artificial intelligence stocks in search of higher returns, as many investors are now doing.
Instead, Jim Cramer is selling his Bitcoin because he’s worried about the “quantum threat.” In short, he’s concerned that super-powerful quantum computers will soon be able to crack Bitcoin’s cryptography, potentially leading to hundreds of billions of dollars in losses for crypto investors.
How real is the “quantum threat”?
Cryptocurrencies are valuable for the cryptographic encryption they provide. If that encryption is ever put at risk, it could lead to a crisis of investor confidence. That’s why the so-called “quantum threat” posed by quantum computers has been percolating around Bitcoin for nearly a decade now.
The good news is that today’s computers, no matter how powerful they are, have no realistic chances of breaking Bitcoin’s encryption. But what about tomorrow’s computers? That’s what has Jim Cramer worried.
Image source: Getty Images.
Earlier this year, the quantum computing research unit at Alphabet (GOOG -0.12%) (GOOGL -0.13%) made headlines when it suggested that Bitcoin might be at much more risk than ever suspected. As much as one-third of all Bitcoin in the world might be at risk. And the threat, far from being some far-off science fiction reality, might actually materialize within the span of just a few years.
No wonder, then, that a number of high-profile investors have already thrown in the towel on Bitcoin. Cramer did so after IBM (IBM -1.19%) CEO Arvind Krishna appeared on Mad Money to comment on quantum computers and the quantum threat.
However, plenty of investors think the quantum threat is way overblown. Some think that the threat is decades away. Even if the threat is just several years away, that should give the blockchain developer community plenty of time to update Bitcoin’s cryptography for the quantum era.
Post-quantum cryptography for Bitcoin
And, indeed, that’s exactly what appears to be happening with Bitcoin right now. In July, a consortium of more than a dozen firms, led by Coinbase Global (COIN -3.53%) and Strategy (MSTR -4.18%), announced efforts to boost Bitcoin’s cryptography to combat the quantum threat.
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All told, more than $15 million has now been pledged to fight the quantum threat and to protect the Bitcoin blockchain for future generations of investors. That leads me to think that many of the current fears about quantum computing have been hyped to an unrealistic level.
If you lived through the Y2K “millennium bug” hype bonanza, you’ll know exactly what I mean. People thought the world was going to fall apart as soon as the year clicked from 1999 to 2000, but what actually happened?
With that in mind, I’m still bullish on Bitcoin. The quantum threat is exactly the type of fear, uncertainty, and doubt (FUD) that always appears during crypto bear markets. For now, I’m ignoring this threat and focusing on Bitcoin’s long-term growth trajectory.
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