Bitcoin’s 46% drop from its October high near $126,100 to around $67,000 has fueled debate about what caused the pullback. Some market participants have pointed to quantum computing as a future threat to the cryptographic security of the network. Others say the explanation lies elsewhere, in the movement of capital, strengthening the economy and changing the economy of the miners.
In a recent episode of the Unbundled podcast hosted by Laura Shin, Bitcoin developer Matt Corallo rejected the idea that quantum fear is the cause of the decline. If investors were pricing the quantum risk close to Bitcoin’s encryption, he said, Ether would likely outperform rather than fall in line.
Bitcoin is down about 46% from its all-time high, while Ether is down about 58% since the start of the October market break. Corallo argued that this relative weakness undermines the claim that quantum computing has unique weight in Bitcoin. He added that some owners may be looking for a scapegoat to explain the weak price action.
The quantum debate has gained visibility as researchers explore post-quantum cryptography and as asset managers review disclosures. Last year, BlackRock amended the registration statement of the iShares Bitcoin ETF to flag quantum computing as a potential risk to the integrity of the network.
Corallo responded that the market price does not indicate urgency. He describes the current environment as one where Bitcoin competes for capital with other sectors, especially artificial intelligence.
Bitcoin mining and AI infrastructure
AI infrastructure requires large data centers, specialized chips and large amounts of power. That financial momentum, he suggested, drew investor attention and funding that would otherwise have flowed into digital assets.
Mining data shows these crosscurrents. Bitcoin mining difficulty has recently risen to 144,4 trillion, an increase of 15% and the largest percentage jump since 2021, when China’s mining ban disrupted the network before it became stable.
The difficulty adjusts every 2,016 blocks, roughly every two weeks, to keep block production close to the 10-minute average regardless of hashrate changes.
The latest increase follows a 12% drop in complexity after a slowdown in computing power. In October, when bitcoin was trading near $126,500, the hashrate reached 1.1 zettahash per second. As prices dropped to $60,000 in February, the hashrate dropped to 826 exahash per second. It has since recovered to around 1 zettahash per second as bitcoin regained the $60,000 high range.
Despite that standstill, the miners’ economy remains strong. Hashprice, the average daily revenue per unit of hashrate, sits near a multi-year low of around $23.9 per petahash per second. Low incomes have tight limits, especially for users with high energy costs. Large miners with access to cheap energy have continued to expand. The United Arab Emirates, for example, estimated $344 million in unrealized profits from mining activities.
At the same time, several publicly listed firms are redistributing energy and deploying computing resources to AI and high-performance computing data centers. Bitfarms has recently rebranded to remove clear bitcoin indicators as it increases its focus on AI infrastructure.
Activist investor Starboard Value has urged Riot Platforms to expand further into AI data center operations. The change underscores Corallo’s point that bitcoin is now directly competing with other capital-intensive technologies.
Bitcoin merges with ‘great fear’
Onchain data suggests that the market remains in a pressure phase. Analytics firm Glassnode reports that BTC has broken below the “True Market Mean,” a model that tracks the cost base of active supply and is currently sitting near $79,000.
The company identifies the Made Price, approximately $54,900, as the lower bound of the structure. Bitcoin has traded between $60,000 and $70,000 in recent sessions, in that tunnel.
Emotions remain fragile. The Crypto Fear and Greed Index has registered “intense fear” for weeks. However, some analysts see support for the rating.
Bitwise’s head of European research, André Dragosch, said that bitcoin seemed insignificant compared to the growing global money supply, gold flows and commodity exchanges. He expects a consolidation rather than a quick recovery, noting that sharp snaps rarely produce quick V-shaped rebounds outside of critical events.
Big data may shape the next move. Traders are watching US core PCE inflation figures for signals on Federal Reserve policy. Higher inflation may support commodity shortages in theory, but a hawkish response could strengthen the dollar and pressure risk markets.
At the time of writing, Bitcoin is trading near $67,000.
