BlackRock Issues Bitcoin Warning, Says BTC Source Code Could Be Rendered ‘Flawed or Ineffective’ by Quantum Computing

The biggest asset manager in the world has acknowledged the potential of a critical threat that could weigh on Bitcoin ( BTC ) in the future.

In its updated prospectus for its iShares Bitcoin Trust ETF (IBIT), BlackRock mentions quantum computing under its “risk factors” section.

Quantum computers are considered by many to be a potential threat to Bitcoin due to their theoretical ability to, in the future, override the cryptographic schemes that secure blockchains.

While quantum computers have not yet demonstrated an ability to come anywhere close to threatening Bitcoin, BlackRock says it, along with other technological advances, could render the flagship cryptocurrency “flawed and ineffective.”

“…In the past, flaws in the source code for digital assets have been exposed and exploited, including flaws that disabled some functionality for users, exposed users’ personal information and/or resulted in the theft of users’ digital assets.

The cryptography underlying Bitcoin could prove to be flawed or ineffective, or developments in mathematics and/or technology, including advances in digital computing, algebraic geometry and quantum computing, could result in such cryptography becoming ineffective. In any of these circumstances, a malicious actor may be able to compromise the security of the Bitcoin network or take the Trust’s Bitcoin, which would adversely affect the value of the Shares. Moreover, the functionality of the Bitcoin network may be negatively affected such that it is no longer attractive to users,
thereby dampening demand for Bitcoin.

Even if another digital asset other than bitcoin were affected by similar circumstances, any reduction in confidence in the source code or cryptography underlying digital assets generally could negatively affect the demand for digital assets and therefore adversely affect the value of the Shares.

Moreover, because digital assets, including bitcoin, have been in existence for a short period of time and are continuing to develop, there may be additional risks in the future that are impossible to predict as of the date of this prospectus.”

BlacRock’s IBIT – which is believed to be the most successful ETF of all time, currently has $70.1 billion worth of Bitcoin backing it.

BTC is trading at $109,483 at time of writing.

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