Brazil’s largest bank recommends a 3% Bitcoin portfolio allocation: ‘real diversification’

In a recent social media post, Blockstream CEO Adam Back has dismissed quantum FUD (fear, uncertainty, doubt) around Bitcoin, exposing that some fearmongering stems from the lack of understanding of how Bitcoin actually secures its network.

Writer Josh Otten has argued that a quantum computer could use Shor’s algorithm to break "the encryption guarding Bitcoin’s earliest wallets."

"This would expose the private keys to Satoshi Nakamoto’s fortune, likely crashing the market and destroying trust in the whole system," he predicted. 

According to Otten, this is the likeliest scenario that could push the price of Bitcoin to nearly zero in virtually no time. 

This implies that the private keys to early Bitcoin addresses could be exposed. 

However, Bitcoin wallets rely on elliptic curve cryptography (ECC) for signing transactions, specifically the secp256k1 curve.

Private keys are used to sign transactions while public keys and addresses allow verification. This is not the same as encrypting data. Encryption implies that data is hidden and can be decrypted. Bitcoin's security model is based on signatures that prove ownership without exposing the private key.

Quantum computers threaten the signing algorithm, not encryption per se.

A sufficiently powerful quantum computer could theoretically use Shor’s algorithm to derive private keys from public keys. However, addresses don’t reveal public keys until you spend from them. Early Bitcoin wallets that have never spent their coins haven’t revealed their public keys. 

Assessing quantum threat

Ethereum co-founder Vitalik Buterin has warned that the quantum threat is real and measurable. 

Solana's Anatoly Yakovenko has estimated that there is a 50/50 chance that enough quantum power could exist to threaten Bitcoin’s cryptography within the next five years. 

However, Back has explicitly stated that Bitcoin is unlikely to face a meaningful quantum computing threat for 20–40 years (if ever). 

Even the most advanced systems today have high qubit counts but lack the error‑corrected logical qubits needed to run algorithms like Shor’s at scale. Moreover, post-quantum cryptography already exists. 

At first glance, XRP's on-chain payment volume declining to almost zero levels appears concerning, but the background is more important than the headline. At the moment, timing market mechanics and the source of liquidity–or lack thereof–are more important than XRP's structural flaws.

XRP is still moving down

After failing to recover important moving averages, XRP is still stuck in a wider declining channel on the price side. With the 200-day serving as far-off overhead resistance, the asset stays below its 50-day and 100-day averages. Instead of being impulsive, this keeps price action constrained and responsive. Chart by TradingView">

Momentum indicators show this reluctance: the RSI is in the low 40s, not oversold, but obviously weak. The price is weak, but not broken, to put it briefly.

The XRP Ledger payments volume chart, which displays activity collapsing toward zero, is the more perplexing signal. This is the point at which many people make incorrect assumptions. The decline does not indicate that XRP use has abruptly stopped or that the network is dead. 

The weekend effect associated with institutional and ETF-related activity is the primary driver. The recent volume expansions of XRP have been significantly impacted by the U.S.-based engagement, especially via regulated platforms like Coinbase. It's important because in the U.S. the way that markets function varies throughout the week.

Liquidity is suspended

Over the weekend, ETF-related flows, institutional desks, and numerous compliance-focused participants essentially stopped or reduced their activity. On-chain payment volume can quickly dry up once those players leave, particularly if retail isn't making up for it. This dynamic explains why the volume of payments falls, but the price does not. Liquidity has been suspended, not eliminated.

Similar declines have historically happened during times when institutional demand momentarily vanished, only to sharply reappear after traditional markets reopened. If ETF-related flows and U-return during weekday sessions, what should investors anticipate?

A debate broke out on social media on Saturday about the potential effects of a quantum computer hacking Satoshi Nakamoto’s Bitcoin stash and then dumping those coins onto the market.

The debate began when YouTuber Josh Otten shared a price chart of BTC crashing to $3.00 and said that this could happen if a sufficiently powerful quantum computer emerges and steals pseudonymous Bitcoin creator Satoshi Nakamoto’s 1 million BTC and sells them.

“Many OGs would buy the flash crash. The Bitcoin network would survive; most coins are not immediately vulnerable,” long-term Bitcoin holder Willy Woo said.

Experts are increasingly signaling a potential crypto bull run in the first quarter (Q1) of 2026, driven by a convergence of macroeconomic factors.

Analysts suggest Bitcoin could surge between $300,000 and $600,000 if these catalysts materialize.

Five Macro Trends Fueling a Potential Rally in Q1 2026

A combination of five key trends is creating what analysts describe as a “perfect storm” for digital assets.

1. Fed Balance Sheet Pause Removes Headwind

The Federal Reserve’s quantitative tightening (QT), which drained liquidity throughout 2025, ended recently.

Simply halting the liquidity drain is historically bullish for risk assets. Data from previous cycles suggest Bitcoin can rally up to 40% when central banks stop contracting their balance sheets.

Analyst Benjamin Cowen indicated that early 2026 could be the time when markets begin to feel the impact of the Fed ending its QT.

2. Rate Cuts Could Return

The Federal Reserve recently cut interest rates, with its commentary and Goldman Sachs forecasts indicating interest rate cuts could resume in 2026, potentially bringing rates down to 3–3.25%.

Lower rates typically increase liquidity and boost appetite for speculative assets such as cryptocurrencies.

3. Improved Short-End Liquidity

Increased Treasury bill purchases or other support at the short end of the yield curve could ease funding pressures and reduce short-term rates. The Fed says it will start technical buying of Treasury bills to manage market liquidity.

The Fed periodically comes in during short-term funding markets amid instances of liquidity imbalances. These imbalances manifest in the overnight repo market, where banks borrow cash in exchange for Treasuries.

Recently, multiple indicators point to a rising short-term funding pressure, including:

• Money market funds sitting on elevated levels of cash,
• T-bill issuance tightening as the Treasury shifted its borrowing mix, and
• Increasing seasonal demand for liquidity.

The Fed initiated a controlled purchase plan of Treasury bills to prevent short-term interest rates from deviating from the target Federal Funds Rate. These are the shortest-maturity government securities, typically ranging from a few weeks to one year in duration.

While not a classic QE move, this measure could still serve as a significant liquidity tailwind for crypto markets.

For Q1 2026, the broader implications for risk assets, such as crypto and equities, are generally positive but moderate, stemming from a shift in Fed policy toward maintaining or gradually expanding liquidity.

4. Political Incentives Favor Stability

With US midterm elections scheduled for November 2026, policymakers are likely to favor market stability over disruption.

This environment reduces the risk of sudden regulatory shocks and enhances investor confidence in risk assets.

5. The Employment “Paradox”

Weakening labor market data, such as soft employment or modest layoffs, often triggers dovish Fed responses.

Softer labor conditions increase pressure on the Fed to ease policy, indirectly creating more liquidity and favorable conditions for cryptocurrencies.

Expert Outlook Suggests Bullish Sentiment Growing

Industry observers are aligning with the macro view. Alice Liu, Head of Research at CoinMarketCap, forecasts a crypto market comeback in February and March 2026, citing a combination of positive macro indicators.

Some analysts are even more optimistic. Crypto commentator Vibes predicts Bitcoin could reach $300,000 to $600,000 in Q1 2026. This reflects extreme bullish sentiment amid improving liquidity and easing macro conditions.

Currently, market participation remains muted. Bitcoin open interest has declined, reflecting cautious trader sentiment.

However, if these macroeconomic tailwinds materialize, consolidation could quickly give way to a significant surge, setting the stage for a historic start to 2026 in the crypto markets.

Memecoins are not dead because the market is down and the narrative has faded, according to president of payment infrastructure company MoonPay, Keith A. Grossman, who said that memecoins will be back but in a different form.

The real innovation of memecoins is that attention can be tokenized easily and at low costs through blockchain technology, democratizing access to the attention economy, Grossman said. He continued: