Galaxy Digital: The main reason for the $9 billion Bitcoin sell-off is not "quantum computing" risk, but rather market fluctuations and investor sentiment.

Galaxy Digital Research Director clarifies that the main reason clients sold $9 billion worth of Bitcoin in Q4 was not quantum computing risk, but profit-taking. CEO Novogratz states that quantum is “the biggest excuse,” reflecting a weakening of the HODLing belief. Quantum threats require millions of qubits, but current technology has less than 1,000. The BIP-360 proposal is underway, allowing Bitcoin to upgrade in response.

$9 Billion Sell-Off Is Heritage Planning, Not Technical Panic

After the large-scale asset sell-off was confirmed, Galaxy Digital responded to ongoing speculation. The company clarified that the recent liquidation of $9 billion worth of Bitcoin was not driven by technical risks. Research Director Alex Thorn said this institutional move was not due to concerns about Bitcoin’s quantum resistance. He also added that their goal was to quell social media panic over so-called cryptographic vulnerabilities.

CEO Mike Novogratz explicitly stated during Monday’s earnings call that quantum threats are “the biggest excuse.” He pointed out that the process of early Bitcoin investors selling their holdings, similar to an IPO, takes time to complete. The profits realized by early Bitcoin adopters reflect a waning belief in the “HODL” philosophy.

Novogratz said, “Many people are very enthusiastic about the concept of ‘stockpiling.’ But somehow, that enthusiasm has faded, and selling has begun.” This observation reveals a harsh reality: even the most steadfast Bitcoin believers, after holding for over 10 years and gaining thousands or even tens of thousands of times in returns, will eventually choose to cash out. This is not a collapse of faith but rational wealth management.

This sale accounts for roughly one-quarter to one-third of the total annual inflow of the iBit Bitcoin ETF under BlackRock in 2025. Galaxy facilitated this transaction as part of an estate planning measure completed in July 2025, even though issues related to quantum computing only surfaced recently during earnings discussions. This timeline reveals an important fact: the decision to sell was made as early as July 2025, when Bitcoin prices were still high and discussions about quantum computing were far less prominent. Attributing the sell-off to quantum computing is purely a post hoc rationalization.

Three Truths About the $9 Billion Sell-Off

Timing: Decision made in July 2025, well before the surge in quantum computing discussions

Motivation: Estate planning and profit-taking, not technical panic

Scale: Equivalent to 25-33% of the IBIT ETF’s annual inflow, a major institutional move

Quantum Computing Threat Is Overhyped

Novogratz admits that quantum computing has long been viewed as a threat to cryptocurrencies. He dismisses concerns among Bitcoin developers that they might be unable to implement quantum-resistant upgrades when necessary. “I don’t think that will happen,” Novogratz said. “In the long run, quantum computing won’t be a big problem for cryptocurrencies. It will be a big problem for the whole world, but cryptocurrencies, especially Bitcoin, will be able to handle it.”

This judgment is based on realistic technical assessments. Currently, quantum computers operate with fewer than 1,000 qubits. It is estimated that hundreds of thousands to millions of qubits would be needed to break Bitcoin’s encryption, so this threat is not imminent. Progress from 1,000 to millions of qubits is not linear but faces enormous technical barriers. Each additional qubit exponentially increases error rates and maintenance difficulty.

Asset management firms and cryptographers have been concerned about advances in quantum computing. However, experts like Adam Back believe such threats are decades away from materializing and pose little real risk to networks. Back, the inventor of Hashcash and a foundational figure in Bitcoin’s proof-of-work mechanism, is highly authoritative in cryptography. If even Back considers the quantum threat distant, that assessment is highly credible.

Coinbase, in its risk disclosures, admits that Shor’s algorithm could potentially break the signatures protecting Bitcoin addresses’ private keys. Modern Bitcoin addresses hash their public keys for added security. About one-third of Bitcoin supply uses older address formats (public key exposed), which are theoretically more vulnerable to quantum attacks. However, this does not mean these Bitcoins will immediately vanish; it only indicates a need to migrate to more secure address formats promptly.

Bitcoin Community Is Actively Responding

To address these risks, the community is promoting proposals like BIP-360. This mechanism will introduce quantum-resistant signatures to ensure the security of addresses that could be vulnerable in the distant future. Recently, industry efforts to counter quantum threats have accelerated. Ethereum (ETH) Foundation established a post-quantum team in January this year, and Cardano (ADA) has been actively pushing forward quantum-resistant upgrades.

These technological upgrades are the reason why Novogratz and Thorn are confident in dismissing the quantum threat. The crypto industry is not ignoring quantum computing but actively researching and deploying countermeasures. Unlike traditional banking encryption systems or government secure communications, blockchain’s open-source and decentralized nature allows for rapid upgrades through community consensus. When the threat becomes imminent, Bitcoin can implement quantum-resistant algorithms via soft or hard forks.

Meanwhile, CEO Novogratz remains optimistic about the ecosystem revival driven by the CLARITY Act. He guarantees that clear U.S. regulatory frameworks will help stabilize prices and attract capital inflows again. This optimism is based on the pro-crypto stance of the Trump administration, and if the Market Structure Bill passes, it could clear long-term regulatory uncertainties for the crypto industry.

In summary, despite the panic caused by the large liquidation, Bitcoin’s fundamental technical outlook remains solid. The quantum computing threat is greatly exaggerated; the real motivation behind the $9 billion sell-off is profit-taking and wealth management, not technical panic. Currently, industry attention is focused on meetings between Trump’s government and industry leaders to determine the future development of stablecoins and market structure.