Saudi Arabia ramps up Quantum Computing, is Bitcoin facing a new threat?

Saudi Aramco stated that the 200-qubit computer manufactured by the French neutral atom Quantum Computing company Pasqal has been installed in its own Dammam data center, which is specifically designed for industrial applications such as energy modeling and materials research.

Quantum Computing seems to be progressing faster than expected. In a blog post on November 13, quantum computing researcher Scott Aaronson (Schlumberger Centennial Chair Professor in the Department of Computer Science at the University of Texas at Austin) stated, “Given the astonishing speed of current hardware development,” it is “very likely” that a fault-tolerant quantum computer capable of running the Shor algorithm will be built before the 2028 U.S. presidential election.

But the question is, is this a serious threat or a blind attempt?

Auh stated that national-level investment motives are not limited to the field of cryptanalysis.

According to researcher Ian McCormack, a system with 200 quantum bits is relatively small in practical applications because current machines are limited by noise and short coherence times, resulting in a limited number of executable operations.

“200 qubits are enough to conduct some interesting experiments and demonstrations—provided that the quality of the qubits is high enough, but even with such a small number it is difficult to achieve. However, this is far from sufficient for error correction calculations, and executing Shor's Algorithm requires exactly this computational power,” he explained, referring to the quantum algorithm used for integer factorization.

Caltech graduate Eli Batyaye stated, “What you need is a very long coherence time, far greater than your operation duration. If your operation duration is one microsecond and your coherence time is one second, that means you can perform about a million operations.”

What is concerning is that this ability could not only undermine the encryption technology used by Bitcoin, but also compromise many security systems that support the global economy.

“Quantum Computing has a significant probability (over 5%) of posing a major or even existential long-term risk to Bitcoin and other cryptocurrencies,” said Christopher Peikert, a professor of Computer Science and Engineering at the University of Michigan. “However, in the next few years, it is still unlikely to pose a real threat; Quantum Computing technology has a long way to go before it threatens modern cryptography.”

What is more concerning is that, according to market reactions, this decline may continue. Funds are continuously flowing out. From the perspective of ETFs, the outflow of funds from Bitcoin exchange-traded funds (ETFs) reached $3.5 billion in November, marking the largest single-day outflow since February. “This indicates that institutional investors have stopped allocating Bitcoin,” said Marcus Tielen, founder and CEO of 10X Research. “ETF institutions have turned into sellers, and as long as they continue to sell, I believe it will be difficult for the market to maintain an upward trend or rebound.”

Of course, there are also some optimistic news; the Federal Reserve's monetary policy is showing a more “dovish” stance. According to CME's “FedWatch”: the probability of the Federal Reserve cutting interest rates by 25 basis points in December is 84.9%, while the probability of keeping the rate unchanged is 15.1%. The probability of the Federal Reserve cumulatively cutting rates by 25 basis points by January next year is 66.4%, with a probability of 11.1% for maintaining the rate unchanged, and the probability of a cumulative cut of 50 basis points is 22.6%.

Coindesk analyst Omkar Godbole stated that the first resistance level to watch for Bitcoin is the 200-hour simple moving average (SMA), currently close to $88,000. Since Monday, this level has acted as a resistance point for price upward movements, limiting the extent of the rally. The next resistance level to watch is in the $98,000–99,000 range, a zone that previously saw multiple intraday lows earlier this month and in June of this year.

Even Arthur Hayes, who has always been optimistic, has changed his tone, believing that the price of Bitcoin will remain below $90,000 and may retest the effective support level of $80,000.

More pessimistic crypto analyst @ali_charts even stated that the key support levels might be at $75,740, $56,160, and $52,820.

Of course, there are still institutions with an optimistic view, but they are more focused on ETH. Yi Lihua, founder of Liquid Capital, stated on social media today: “From the investment research data, ETH is being heavily shorted by multiple platforms and institutions. I believe that after surviving the toughest November, it may welcome a short squeeze. Compared to ETH four years ago, with stablecoins/ETFs/DAT/policies at a completely different level of favorable conditions, the price of ETH is severely undervalued.”