ARK Invest: 34.6% of Bitcoin Supply Faces Quantum Computing Risk

Investment firm ARK Invest, in collaboration with Unchained, has published a comprehensive study on the impact of quantum computing on Bitcoin network security. According to the analysts, 34.6% of the total BTC supply — approximately $483 billion at current prices — is potentially vulnerable to a future quantum attack.

Which coins are at risk

The study identifies three categories of vulnerable coins. The largest group — approximately 5 million BTC (25% of total supply) — resides on addresses that have been reused. When a user sends a transaction from such an address, their public key becomes visible on the blockchain, theoretically allowing a quantum computer to derive the private key.

The second category — roughly 1.7 million BTC (8.6%) — sits on legacy P2PK (Pay To Public Key) addresses. This is the earliest transaction format in the Bitcoin network, used by Satoshi Nakamoto himself. These addresses have their public keys exposed by default.

Taproot introduces new risks

The third category — approximately 200,000 BTC (1%) — occupies P2TR (Pay To Taproot) addresses. This is a relatively new format introduced by the Taproot upgrade in 2021. Researchers note that while Taproot improved functionality and privacy, its characteristics make these addresses vulnerable to quantum attacks through the exposed key path.

BIP-360 as the path to protection

To counter the quantum threat, researchers propose implementing BIP-360 — a Bitcoin protocol upgrade proposal. BIP-360 would introduce a new Pay-to-Merkle-Root output type, replacing cryptographic algorithms vulnerable to quantum attacks with post-quantum standards ML-DSA or SLH-DSA.

Importantly, this upgrade could be deployed as a soft fork — without forcing a network split. Existing nodes would continue operating, and users could gradually migrate their funds to protected addresses in the new format.

Not a sudden catastrophe but a gradual process

The study's key conclusion is that the quantum threat will not arrive as a sudden "Q-Day." Quantum computing development is a gradual process, and the Bitcoin community will have sufficient time to adapt. The study's authors — Dhruv Bansal (Unchained CSO), Tom Honzik, and David Puell (ARK Invest) — emphasize that a proactive approach to implementing post-quantum cryptography is the best strategy.

For those holding or planning to acquire Bitcoin, the study recommends avoiding address reuse and staying informed about protocol updates. Coins on modern P2SH and P2WSH address formats remain protected from quantum attacks at the current level of technology.