BlackRock’s Spot Bitcoin (BTC) Exchange-traded fund (ETF), trading on the Nasdaq as IBIT, fell on Tuesday as the overheated crypto market cooled and unfounded concerns that Bitcoin’s security could be compromised by quantum computing spread on social media.
According to data source Investing.com, IBIT’s price fell 5.3% to $54.73, its biggest daily decline since early August. Bitcoin price fell over 4% to hit lows below $94,300 as altcoin traders became overleveraged were liquidatedleading to greater losses in the broader market.
While such pullbacks are typical of a bull market, Monday’s losses are notable because they coincided with Google’s announcement Willow quantum computer chipwho can solve in just five minutes a problem that would take the world’s fastest supercomputers 10 septillion years to solve.
Multiple users on X expressed concerns that Willow could easily crack Bitcoins complex mathematics SHA-256thereby putting the network at risk. That’s because Willow has achieved 105 qubits with improved error rates. Think of a qubit as a super-powerful version of a normal computer bit that can only be a 0 or a 1. A qubit can be both 0 and 1, like a switch that can be on and off until it is checked. That helps Quantum computers Process problems much faster than normal computers.
Some experts said these concerns were unfounded because Willow was still not strong enough to pose a risk.
“Willow has 105 qubits, which is great for quantum experiments, but nowhere near what is needed to crack Bitcoin’s encryption,” said the pseudonymous analyst and technology expert Cinemad producer said the producer on X. “Experts estimate that it would take about 1 million high-quality qubits to compromise the security of Bitcoin.”
In 2022, research by Universal Quantum, affiliated with the University of Sussex in the United Kingdom, revealed that a quantum computer with a Capacity of 1.9 billion qubits would be required to crack Bitcoin’s encryption.
Damage done?
Although it is unclear whether quantum FUD drove BTC and IBIT lower, according to technical charts, the damage appears to have already been done.
While IBIT hit a new high on Friday, the 14-day Relative Strength Index (RSI) pointed to a bearish divergence, a warning that the rally is running out of steam.
Monday’s decline confirmed bearish divergence and suggested larger losses, with support at $51.54, the November 26 low. To invalidate this outlook, a move above Thursday’s high of $59.16 is needed.
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