The Crypto Basic

Crypto analytics firm Glassnode has found that 6.04 million Bitcoin, equal to 30.2% of the circulating supply, currently faces potential quantum-related risk.

According to its recent report, this potential risk exists because the public keys tied to those coins are already visible on-chain. Based on current market prices, the exposed Bitcoin is worth more than $452 billion.

Key Points

• Glassnode found that 30.2% of Bitcoin’s issued supply, or about 6.04 million BTC, currently faces at-rest quantum exposure.
• Of this figure, structural exposure accounts for 1.92 million BTC, while operational exposure reaches 4.12 million BTC.
• Exchange-related balances represent about 1.66 million BTC, or roughly 40% of operationally exposed Bitcoin.
• The report estimates 13.99 million BTC remains protected because related public keys are still hidden on-chain.

Bitcoin Supply Exposed to Quantum Risk

The report comes as concerns around quantum computing grow within the crypto industry. Notably, blockchain experts have continued to discuss whether future quantum machines could eventually break parts of Bitcoin’s security model. 

Glassnode said its research does not predict when such attacks could become possible. The company instead focused on measuring which coins already have visible public keys and could therefore face exposure under a future quantum attack scenario.

The company found that 6.04 million BTC, worth $452 billion, faces exposure to quantum risks. Of this figure, Glassnode divided the exposed supply into two main categories. 

Specifically, structural exposure makes up 1.92 million BTC, representing 9.6% of the issued supply, while operational exposure accounts for the larger share at 4.12 million BTC, or 20.6%. Further, exchange-related balances alone contribute 1.63 million BTC, equal to 8.1% of all issued Bitcoin.

Meanwhile, according to the report, 13.99 million BTC, or 69.8% of the issued supply, does not currently face this type of at-rest exposure because the related public keys remain hidden on-chain.

Why Public-Key Visibility is Important 

Glassnode explained that under current computing systems, attackers cannot realistically derive Bitcoin private keys from public keys. However, a sufficiently advanced quantum computer using Shor’s algorithm could theoretically reverse the process.

As a result, the main issue is whether a public key already appears on-chain. If the public key remains hidden, the coin stays protected under this specific at-rest model. If the public key is already public, an attacker would not need to wait for the owner to move the coins before attempting to target them.

The report then separated at-rest exposure from on-spend exposure. Glassnode focused on “at-rest” exposure, which involves coins sitting in outputs where public keys are already visible. In contrast, on-spend exposure happens when a transaction temporarily reveals a public key during the spending process.

Glassnode stressed that coins that are “safe” in the current context simply mean the public key is not currently exposed on-chain. It does not mean the coins are fully protected against every possible future quantum threat.

Bitcoin Under Structural Exposure

The analytical firm noted that structural exposure involves vulnerability tied to Bitcoin’s script design. In these cases, certain output types reveal public keys by default, even when users follow proper wallet-management practices.

The structurally exposed category includes early Pay-to-Public-Key outputs connected to Satoshi-era coins, legacy bare multisig structures such as P2MS, and modern Taproot outputs known as P2TR. 

Although these formats serve different purposes and come from different periods in Bitcoin’s history, they all expose public keys or similar data directly on-chain.

The report estimates that structurally unsafe Bitcoin totals 1.92 million BTC, or 9.6% of the issued supply. Glassnode said Satoshi-era holdings represent the most lasting form of structural exposure because lost or inactive coins cannot easily move into safer address structures.

The company also called attention to Taproot. Notably, while this model improves privacy, efficiency, and scripting flexibility, output keys remain visible on-chain. 

Bitcoin Under Operational Exposure

Glassnode said operational exposure comes mainly from wallet behavior, not script design. In these situations, coins may begin in safer address formats, but practices such as address reuse, partial spending, or custody management later expose the public keys.

The report explained that address types, including P2PKH, P2SH, P2WPKH, and P2WSH, normally keep public keys hidden while coins remain at rest. However, once a transaction reveals the public key, any remaining balance tied to that same address loses its protection.

Glassnode found that operationally unsafe Bitcoin totals 4.12 million BTC, or 20.6% of the issued supply. This figure is 2.1 times larger than the structurally exposed balance. 

Specifically, exchange-related holdings alone account for 1.66 million BTC, equal to 8.3% of the total supply, representing roughly 40% of all operationally exposed Bitcoin.

The oldest Bitcoin holders, those who have held for more than 10 years, have begun moving their coins at an unusual rate.

As Bitcoin crashes from its May 10 high of $82,000 to the current price of $75,400, data shows that some of the network’s oldest holders have started moving coins at unusually high levels. 

Key Points

• Bitcoin’s oldest holders have begun moving coins at historically high levels.
• 10-year-plus Bitcoin holders reached the 97th percentile in spending activity across the past decade.
• This group moved 51,350 BTC over 30 days, but their balances remained near record highs.
• Matthew Sigel says quantum migration may be responsible for the recent unusual activity.
• Around 6.9 million BTC remain quantum vulnerable because their public keys already appear on-chain.

Bitcoin’s Oldest Holders Awaken

Matthew Sigel, Head of Digital Assets Research at VanEck, recently discussed the trend in a post on X. Sigel said Bitcoin holders who have kept coins for more than 10 years are now moving them at record levels, even though the total balances held by this group still remain close to all-time highs. 

According to him, large-scale quantum migration and the gradual aging of Bitcoin supply may be the factors behind these movements, which explains why the activity has not led to a major drop in long-term holdings.

Sigel also highlighted weakness among holders who bought Bitcoin between one and three years ago. According to him, balances in that group have dropped to between the second and tenth percentiles compared to historical levels. 

Data Confirms Activity Spike From 10-Year Holders

An accompanying chart from VanEck confirms this high activity. The report groups holders based on when they originally bought Bitcoin and compares current spending activity against past behavior across 1-year, 2-year, 4-year, and 10-year periods.

Notably, the 10-year-plus group reached the 89th percentile over 1 year, 91.6th over 2 years, 94th over 4 years, and 97th over 10 years. This cohort moved 51,350 BTC during the 30-day period, marking the smallest in the chart.

For context, the 97th percentile reading over 10 years means these holders are currently moving coins more actively than during 97% of similar 30-day periods over the past decade. 

While the transfer volume looks smaller than that of other groups, the recent readings are still important because very few coins from that era remain untouched. 

The data shows that wallets that sat dormant through the 2017 peak, the 2018 collapse, the 2021 highs, the FTX crash of 2022, and every cycle in between are now reactivating at a historically extraordinary rate.

Quantum Migration May Explain the Sudden Moves

However, it remains unlikely that the activity comes from large-scale selling. Notably, Sigel noted that quantum migration appears to be one of the main reasons behind the recent spike in movements from old wallets.

For the uninitiated, quantum migration involves moving very old Bitcoin, especially coins held for more than 10 years, from older wallet formats that could become vulnerable to future quantum computers. 

Many early holders now move funds into newer and safer address formats like Taproot and SegWit as concerns about future security risks continue to grow.

Current estimates show that about 6.9 million BTC may still be vulnerable because their public keys have already appeared on-chain. This figure includes around 1.7 million BTC stored in older Pay-to-Public-Key formats. 

In April, Jameson Lopp and other contributors introduced BIP-361, a proposal that presents a gradual move toward quantum-resistant signature systems. The proposal could also include deadlines that would force holders to move older coins before they become frozen or unusable.

Concerns around quantum computing have increased after NIST finalized post-quantum cryptography standards. At the same time, fears continue to grow that future quantum computers could eventually break ECDSA encryption using Shor’s algorithm.

Other Bitcoin Holding Cohorts

While the oldest holders drew the most attention, the 1-to-3-year groups recorded the largest transfer volumes in the data. 

Holders who bought Bitcoin 1 to 2 years ago reached the 84.5th percentile over 1 year, 85.1st over 2 years, 80th over 4 years, and 76th over 10 years. These investors moved 848,895 BTC, the highest volume among all groups.

Meanwhile, holders from the 3-to-5-year group remained mostly inactive. Their readings came in at 19.7 over one year, 21.6 over 2 years, 41 over 4 years, and 45 over 10 years, with 197,995 BTC moved. The 5-to-7-year group showed similar inactivity.

However, the seven-to-10-year group saw renewed activity. Specifically, these holders recorded 57.6 over one year, 73 over 2 years, 85 over 4 years, and 86 over 10 years, with 111,445 BTC moved over the 30-day period.