BlackRock’s Bitcoin ETF Suffers Its Largest Drop in Four Months as Quantum Computing FUD Takes Hold.

BlackRock’s Bitcoin ETF (IBIT) experienced a sharp 5.3% decline on Monday, marking its largest drop since early August. This slide came as the overheated crypto market began to cool, and concerns about the potential impact of quantum computing on Bitcoin’s security surfaced on social media.

IBIT’s price fell to $54.73, while Bitcoin also saw a 4% drop, falling below $94,300. The broader market was affected as well, with significant losses caused by the liquidation of overleveraged altcoin positions. Although such pullbacks are common in bull markets, this particular dip was particularly notable due to Google’s announcement of its Willow quantum computing chip. The chip can solve complex computational problems in minutes, problems that would take traditional supercomputers millions of years to process, sparking fears that it could eventually break Bitcoin’s cryptography.

Concerns about Willow’s potential impact on Bitcoin’s security were widely shared across platforms like X, where users worried that its 105 qubits could crack the SHA-256 algorithm that underpins Bitcoin’s security. In quantum computing, a qubit can exist as both 0 and 1 at the same time, exponentially increasing the computational power compared to conventional bits.

However, experts have dismissed these fears, emphasizing that Willow’s 105 qubits are far too small to pose a threat to Bitcoin. “Willow is impressive but not even close to what would be needed to break Bitcoin’s encryption,” said pseudonymous analyst Cinemad Producer on X. “Experts believe at least 1 million high-quality qubits would be required to even start making a dent.”

Research from Universal Quantum, associated with the University of Sussex, also supports this view, stating that a quantum computer with around 1.9 billion qubits would be necessary to breach Bitcoin’s encryption—far beyond Willow’s current capabilities.

Despite the lack of any real threat from quantum computing, the market’s response seems to have already triggered a downward trend. IBIT’s price hit a new high on Friday, but the 14-day relative strength index (RSI) showed a bearish divergence, suggesting that the bullish momentum was fading. Monday’s drop confirmed the bearish trend, indicating potential further declines, with support at $51.54, the low from November 26. IBIT would need to rise above $59.16 to reverse the negative outlook.