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Construction Begins on Quantum Facility Capable of Breaking Bitcoin

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Crypto Breaking News

The quantum computing race is edging closer to a commercially viable milestone, with PsiQuantum revealing progress toward a facility that could house a million qubits. The company, which has tied its plans to a collaboration with Nvidia, says the ambitious Chicago site will rely on advanced error-tolerant architectures to deliver usable quantum power at scale. In parallel, the crypto community remains deeply engaged in the implications for Bitcoin’s security, a debate that has intensified as quantum research advances and real-world milestones creep closer to feasibility.

Key takeaways

  • PsiQuantum is moving toward a 1-million-qubit facility described as capable of powering commercially useful quantum computation, backed by a $1 billion fundraising round announced in September and a collaboration with Nvidia.
  • A construction update showed 500 tons of steel erected in six days for the Chicago site, underscoring the rapid pace of on-site development.
  • The crypto community is split on risk: some warn quantum breakthroughs could threaten Bitcoin’s cryptography, while others expect the threat to remain distant, potentially a decade or more away.
  • Analyses and statements emphasize that only a small portion of Bitcoin addresses would be susceptible today, with broader resistance possible through post-quantum upgrades and other safeguards.
  • Key technical benchmarks frame the discussion: preliminary estimates suggest far more qubits than needed to break current cryptography, but practical, scalable quantum systems remain the central hurdle.

Tickers mentioned: $BTC

Sentiment: Neutral

Price impact: Neutral. The article frames potential quantum risk as a broad strategic consideration with limited near-term price signals.

Market context: Quantum progress is unfolding amid a broader crypto market focus on security, post-quantum readiness, and regulatory considerations shaping risk sentiment and investment flows.

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Why it matters

The convergence of quantum computing and crypto security is more than a theoretical concern. If large-scale, fault-tolerant quantum devices become viable, the cryptographic foundations underpinning much of today’s digital assets could face fundamental redesigns. The Bitcoin network, which relies on elliptic-curve signatures, would be the most visible test bed for resilience in the face of quantum threats. In 2024, researchers and industry players have intensified discussions about preemptive upgrades, including hard forks and post-quantum cryptographic standards, as a means of safeguarding long-term security without interrupting existing operations.

PsiQuantum’s latest milestones illustrate the industrial-scale ambitions of quantum developers. The Chicago facility, designed to host one million qubits, is emblematic of the sector’s transition from lab-scale experiments to facilities that could underpin commercial computing for AI, simulation, and optimization workloads. A project of this magnitude hinges on both hardware breakthroughs—error correction, qubit coherence, scalable manufacturing—and software ecosystems capable of harnessing quantum advantage in practical use cases. The $1 billion fundraising and the Nvidia collaboration signal a broad, multi-industry push to de-risk the path to practical quantum advantage, even as critics note that true utility remains some years away.

From a crypto-security perspective, the debate has evolved beyond “if” to “when.” Some Bitcoin proponents argue a quantum-capable attacker could eventually compromise keys and signatures, potentially undermining the integrity of holdings and transactions. Others, including prominent voices in the ecosystem, emphasize that current cryptographic schemes can be fortified through a combination of longer-term keying practices and post-quantum cryptography, reducing the immediacy of risk. A widely cited line of reasoning holds that even if a quantum computer could break certain cryptographic keys, the actual volume of affected funds might be limited, given the distribution of private keys across the network and the ongoing movement toward more secure standards.

Academic and industry analyses also illustrate that the number of qubits needed to break modern cryptography is a moving target. A recent preprint suggested that cracking 2048-bit keys would require on the order of 100,000 qubits, while Bitcoin relies on significantly smaller 256-bit keys in its most widely used schemes. The contrast underscores both the promise and the uncertainty of leveraging quantum capabilities for cryptanalytic purposes. The scale and error-correction requirements for a practical attack remain substantial, and much of the crypto community views rapid, decisive “quantum bursts” as a longer horizon phenomenon rather than an immediate crisis.

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Beyond the security implications, the quantum discourse intersects with broader tech policy and infrastructure planning. The industry’s attention to post-quantum resilience is feeding into discussions about upgrade paths, governance, and the choreography of ecosystem-wide transitions—whether through protocol-level changes, new cryptographic standards, or multi-year roadmaps to migrate away from vulnerable primitives. The ethical and operational challenges of such migrations—including compatibility with existing wallets, exchanges, and custodians—add layers of complexity to an already evolving landscape.

In public statements, PsiQuantum has stressed that it has no plans to exploit quantum capabilities to extract private keys from public ones. Co-founder Terry Rudolph reiterated at a Bitcoin-focused quantum summit that the company’s mission centers on building reliable quantum hardware and software, not on weaponizing cryptographic breaks. This distinction is important for framing the broader industry’s stance: while the threat is acknowledged, the path to actionable security solutions is a collaborative, proactive process rather than a single, dramatic inevitability.

Within the investment and research communities, assessments like those from CoinShares have suggested that even a quantum breakthrough would not instantly destabilize Bitcoin. They estimated that a relatively small subset of the total Bitcoin supply—roughly 10,230 BTC—would be at “quantum-vulnerable” addresses, which, at prevailing prices, could be managed through routine trading and standard risk controls. Such figures reinforce the view that the market’s immediate reaction to quantum news would likely be measured, with systemic safeguards and hedging strategies mitigating abrupt price shocks.

What to watch next

  • Milestones for PsiQuantum’s Chicago facility: timelines for qubit generations, error correction performance, and integration with Nvidia’s hardware stack.
  • Advancements in post-quantum cryptography standards and standardized migration plans for Bitcoin and other major networks.
  • Regulatory and governance developments around crypto security, including any formal endorsements or requirements for post-quantum readiness.
  • New research clarifying the practical qubit counts needed to threaten current cryptography, and whether optimistic estimates translate to real-world risk.
  • Public disclosures from major exchanges and wallet providers about their preparedness for quantum-era threats and planned upgrade pathways.

Sources & verification

  • PsiQuantum’s fundraising and Nvidia collaboration announcements
  • Public posts by PsiQuantum co-founder Peter Shadbolt about the Chicago site and steel construction
  • Official statements from PsiQuantum regarding non-use of quantum tools to derive private keys
  • CoinShares’ February research on quantum risk to Bitcoin
  • ArXiv preprint discussing qubit requirements to break various cryptographic standards

Quantum ambition tests crypto’s future guardrails

The case of PsiQuantum illustrates a defining moment for the crypto ecosystem: a single project’s trajectory toward a million-qubit capability is forging the boundary between theoretical threat and practical reality. The Chicago facility, described as capable of hosting a million qubits and powered by a plan that includes hundreds of tons of steel and a substantial funding package, embodies a new kind of industrial ambition. If realized, it would mark a leap from demonstrations in laboratory environments to a platform that can sustain complex computations at scale—an essential step for applications in AI, materials science, and optimization that quantum machines promise to accelerate.

Yet the same development timeline that excites researchers also intensifies crypto-security debates. The Bitcoin network, by design, relies on cryptographic primitives that must withstand not only current attack methods but also those that quantum machines might enable in the future. The cornerstone question—when could a sufficiently powerful quantum computer emerge to threaten private keys—drives ongoing discussions about potential fork strategies, cryptographic upgrades, and the transitional work needed to preserve user funds without disrupting network operation.

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Industry observers emphasize that while the mathematical potential of quantum attacks is real, the practical path from theory to exploitation remains riddled with engineering hurdles. The demand for robust error correction, high-fidelity qubits, scalable control systems, and fault-tolerant software stacks creates a gulf between today’s research devices and a weaponized quantum infrastructure. In this sense, PsiQuantum’s progress is a reminder that the crypto security debate is less about overnight collapse and more about sustained vigilance, iterative upgrades, and cross-disciplinary collaboration among hardware developers, cryptographers, and policy makers.

As posture and preparedness become part of routine risk management, the crypto community’s emphasis on post-quantum resilience—whether through hybrid cryptographic schemes, larger key sizes, or forward-looking migration plans—will continue to shape investor sentiment and infrastructure decisions. The debate is not only about Bitcoin’s long-term security but also about how the wider financial system adapts to a quantum-enabled future. If the next few years deliver measurable progress toward scalable, reliable quantum systems, the industry could begin to operationalize safeguards well before any exploitation materializes, translating research milestones into practical risk management and clearer governance pathways.

Risk & affiliate notice: Crypto assets are volatile and capital is at risk. This article may contain affiliate links. Read full disclosure

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Bitcoin miners are becoming AI companies and selling their BTC to fund the transition

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(CoinShares/CoinDesk)

The bitcoin mining industry is undergoing the most fundamental transformation in its history, and the clearest sign isn’t the hashrate or the difficulty adjustments. It’s the balance sheets.

CoinShares’ Q1 2026 mining report, published this week, reveals that the weighted average cash cost to produce one bitcoin among publicly listed miners rose to approximately $79,995 in Q4 2025.

Bitcoin has traded in the $68,000 to $70,000 band, with a CoinDesk report last week estimating losses of $19,000 per BTC mined.

These numbers aren’t sustainable, and the industry knows it. The response has been a wholesale pivot toward artificial intelligence infrastructure that is reshaping what these companies actually are.

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(CoinShares/CoinDesk)

Over $70 billion in cumulative AI and high-performance computing contracts have now been announced across the public mining sector, according to the CoinShares report. CoreWeave’s expanded deal with Core Scientific alone is worth $10.2 billion over 12 years. TeraWulf has $12.8 billion in contracted HPC revenue. Hut 8 signed a $7 billion, 15-year lease for AI infrastructure at its River Bend campus. Cipher Digital has a multi-billion-dollar agreement with Google-backed Fluidstack.

Listed miners could derive as much as 70% of their revenue from AI by the end of 2026, up from roughly 30% today. Core Scientific’s AI colocation revenue already accounts for 39% of its total. TeraWulf is at 27%. IREN is at 9% and scaling rapidly with up to 200 megawatts of liquid-cooled GPU capacity under construction.

That means these mining companies are increasingly becoming data center operators that happen to still mine bitcoin on the side.

The economics explain why. According to CoinShares, the cost differential between bitcoin mining infrastructure at roughly $700,000 to $1 million per megawatt and AI infrastructure at $8 million to $15 million per megawatt is wide, but AI offers structurally higher and more stable returns.

Hash price, the metric that determines miner revenue per unit of computing power, hit an all-time post-halving low of roughly $28 to $30 per petahash per day in early March.

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At those levels, miners running mid-generation hardware need access to electricity below $0.05 per kilowatt-hour to remain cash-profitable. Meanwhile, AI infrastructure contracts promise margins above 85% with multi-year revenue visibility.

How the financials work

The transition is being financed in two ways, and both are visible in the data, the report explained.

First, debt. The sector’s aggregate leverage has fundamentally changed. IREN now carries $3.7 billion in convertible notes across five series. TeraWulf has $5.7 billion in total debt, split between convertible notes and senior secured notes at its compute subsidiary.

Cipher Digital issued $1.7 billion in senior secured notes in November, causing its quarterly interest expense to surge from $3.2 million for the first nine months to $33.4 million in Q4 alone. These are not mining-scale debt loads. These are infrastructure-scale bets that the AI revenue will materialize fast enough to service the obligations.

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Second, bitcoin sales. Publicly listed miners have collectively reduced their BTC treasuries by over 15,000 BTC from peak levels. Core Scientific sold roughly 1,900 BTC worth $175 million in January and is planning to liquidate substantially all remaining holdings in Q1 2026. Bitdeer reduced its treasury to zero in February. Riot Platforms sold 1,818 BTC worth $162 million in December.

Even Marathon, the largest public holder at 53,822 BTC, quietly expanded its policy in its March 10-K filing to authorize sales from its entire balance sheet reserve, partly driven by pressure on its $350 million bitcoin-backed credit facility where the loan-to-value ratio climbed to 87% as prices fell toward $68,000.

(CoinDesk)

The miners that are selling bitcoin to fund AI buildouts are the same companies whose mining operations secure the bitcoin network. That creates a tension at the heart of the transition. When mining is unprofitable and AI is lucrative, the rational economic decision is to reallocate capital away from mining. But if enough miners do that, the network’s security budget shrinks.

The hashrate data already reflects this. The network peaked at approximately 1,160 exahashes per second in early October 2025 and has since declined to roughly 920 EH/s, with three consecutive negative difficulty adjustments, the first such streak since July 2022.

The valuation market has already priced the bifurcation. Miners with secured HPC contracts now trade at 12.3 times next-twelve-month sales. Pure-play miners trade at 5.9 times. The market is paying more than double for the AI exposure, which reinforces the incentive to pivot further.

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The geographic picture is shifting alongside the economics, meanwhile. The United States, China, and Russia now control roughly 68% of global hashrate. The U.S. gained about 2 percentage points of market share in Q4 alone.

But emerging markets are entering the picture. Paraguay and Ethiopia have joined the global top 10 mining countries, driven by HIVE’s 300-megawatt operation in Paraguay and Bitdeer’s 40-megawatt facility in Ethiopia.

Hashrate forecasts and estimates

CoinShares forecasts the network hashrate will reach 1.8 zetahashes by the end of 2026 and 2 zetahashes by end of March 2027, one month later than previously predicted.

But that forecast depends on bitcoin recovering to $100,000 by year-end. If prices stay below $80,000, CoinShares expects hash price to continue falling and the hashrate to decline further as more miners exit.

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A sustained move below $70,000 could trigger larger capitulation that, paradoxically, benefits survivors through lower difficulty.

Next-generation hardware offers a potential lifeline. Bitmain’s S23 series and Bitdeer’s proprietary SEALMINER A3, both operating below 10 joules per terahash, are expected at scale through the first half of 2026. These machines would roughly halve the energy cost per bitcoin compared to current mid-generation fleets. But deploying them requires capital that many miners are directing toward AI instead.

The bitcoin mining industry entered this cycle as a group of companies that secured the network and accumulated bitcoin. It is exiting as a group of companies that build AI data centers and sell bitcoin to fund them.

Whether that’s a temporary response to unfavorable economics or a permanent structural shift depends on one variable: the price of bitcoin. If it returns to $100,000, mining margins recover and the AI pivot slows. If it stays at $70,000 or below, the transition accelerates and the mining sector as it existed for the past decade continues to disappear into something else entirely.

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Morgan Stanley sets 0.14% Bitcoin ETF fee, could be market’s lowest

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Crypto Breaking News

Morgan Stanley is accelerating its crypto ambitions with a plan to launch a spot Bitcoin ETF priced at 0.14% in annual fees. If approved, the vehicle would be the cheapest spot BTC offering in the U.S. market and could push rival fund sponsors to trim fees to stay competitive. The filing appears in the bank’s latest S-1 registration materials and signals a serious intent to broaden access to Bitcoin exposure for Morgan Stanley’s client base.

Industry observers say the move, paired with the bank’s broader crypto strategy, could reshape the U.S. ETF landscape. Bloomberg ETF analyst James Seyffart flagged the filing as a “big move” and forecast an early-April launch for the Morgan Stanley Bitcoin Trust (MSBT). Fellow Bloomberg analyst Eric Balchunas noted the ultra-low fee would be attractive to Morgan Stanley’s advisory network, which manages trillions of dollars in client assets, potentially easing internal conflicts over recommendations. The price tag—0.14%—would sit just a hair below the Grayscale Bitcoin Mini Trust ETF and meaningfully under BlackRock’s iShares Bitcoin Trust ETF, underscoring the fee-pressure dynamic across the space.

Beyond the fee structure, the development underscores Morgan Stanley’s evolving stance on crypto as part of a broader suite of products and services. The bank’s early 2020s shift toward crypto included appointing Amy Oldenburg to lead its digital asset team and pursuing a national banking charter to custody digital assets and execute purchases, sales, and swaps for clients, including staking services. Morgan Stanley previously identified Coinbase and Bank of New York Mellon as the prospective custodians for its Bitcoin ETF, a detail that helps frame how the bank intends to operationalize a spot-BTC product for a traditionally risk-averse client base.

Key takeaways

  • The proposed 0.14% fee for Morgan Stanley’s spot Bitcoin ETF would be the lowest in the U.S. market at launch, positioning the bank as a potential price leader and prompting peers to consider fee reductions to retain assets.
  • If the SEC approves MSBT, Morgan Stanley would become the first traditional bank to issue a U.S. spot BTC ETF, expanding access to crypto exposure for high-net-worth clients and broader Morgan Stanley advisory channels.
  • The move sits within a broader crypto push: Morgan Stanley has filed for a staking Ether ETF and has sought a national trust charter to custody digital assets and trade crypto for clients, signaling a multi-pronged strategy beyond a single ETF product.
  • Analysts foresee an early-April launch window for the MSBT, suggesting the bank is moving with pace to bring a regulated, traditional-finance gateway to Bitcoin into its product lineup.

Strategic significance for Morgan Stanley and the market

The 0.14% fee is not just a stat; it signals a strategic pivot with potential ripple effects. For Morgan Stanley, a successful, low-cost spot BTC ETF would enable seamless integration into its existing advisory framework. As Balchunas noted, the soft price point reduces potential conflicts for roughly 16,000 financial advisors who oversee about $6.2 trillion in client assets, potentially making it easier to recommend cryptocurrency exposure within conventional portfolios. For the broader market, the introduction of a bank-backed spot BTC ETF could heighten competition among ETF providers to offer low-cost, accessible crypto exposure, potentially accelerating adoption among institutions and high-net-worth individuals.

The path remains contingent on regulatory approval. A green light from the U.S. Securities and Exchange Commission would mark a milestone not just for Morgan Stanley but for the broader integration of traditional finance with regulated crypto products. The bank’s broader crypto orchestration—ranging from a Solana ETF filed in January to staking-related offerings and a declared charter to custody and trade digital assets—paints a picture of a lane-change moment for Wall Street institutions that have historically approached crypto with caution.

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What comes next and what to watch

Investors and crypto observers should monitor several moving parts. First, the SEC’s decision on MSBT will determine whether a bank-backed spot BTC ETF can enter the market with a capital-light, cross-sell approach through Morgan Stanley’s vast advisory network. The timing remains uncertain beyond signals from analysts about an early-April launch, but any formal approval would intensify a fee-competition dynamic already visible across existing U.S. spot BTC ETFs.

Second, Morgan Stanley’s broader crypto agenda—its staking ETH ETF, custody capabilities, and the possibility of additional crypto products—will shape how the bank positions itself as a regulated gateway to digital assets. The custodial framework with potential partners like Coinbase and BNY Mellon will influence both product design and client trust as the firm seeks to democratize access without compromising risk controls.

Third, the market will closely watch how competitors respond. If Morgan Stanley’s 0.14% fee sets a new baseline, rival asset managers may need to recalibrate fee structures, custody arrangements, and distribution strategies to maintain market share among sophisticated investors seeking regulated exposure to Bitcoin.

Lastly, the regulatory trajectory for spot crypto ETFs remains a central theme. While a bank-run product could gain traction, final approvals will hinge on how regulators assess custody standards, liquidity, and investor protection in a landscape evolving toward deeper institutional participation in digital assets.

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In sum, Morgan Stanley’s proposed MSBT at a sub-0.15% fee underscores a broader move by legacy financial institutions to normalize and scale regulated crypto exposure. If approved, the impact would extend beyond a single ETF—potentially reshaping fee benchmarks, distribution dynamics, and the pace at which traditional finance fully embraces digital assets in its core client offerings.

Readers should keep an eye on regulatory updates, Morgan Stanley’s official disclosures regarding the MSBT timeline, and any shifts in the competitive landscape as major banks and fund sponsors recalibrate their crypto product menus in response to this development.

Risk & affiliate notice: Crypto assets are volatile and capital is at risk. This article may contain affiliate links. Read full disclosure

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Morgan Stanley Sets Bitcoin ETF Fee at Ultra-Low 0.14%

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Morgan Stanley Sets Bitcoin ETF Fee at Ultra-Low 0.14%

Investment bank Morgan Stanley is seeking to launch its spot Bitcoin exchange-traded fund at a 0.14% fee, which would make it the cheapest in the US market and potentially force rivals to cut fees to stay competitive.

The 0.14% fee, proposed in Morgan Stanley’s latest S-1 registration statement on Friday, would be one basis point below the Grayscale Bitcoin Mini Trust ETF (BTC), currently the cheapest in the US market, and 11 basis points below the BlackRock-issued iShares Bitcoin Trust ETF (IBIT).

“Big move here. They are not messing around,” Bloomberg ETF analyst James Seyffart said, predicting that the Morgan Stanley Bitcoin Trust (MSBT) is “likely to launch in early April.”

Source: James Seyffart

Fellow Bloomberg ETF analyst Eric Balchunas said the low fee means that none of Morgan Stanley’s roughly 16,000 financial advisors — which manage $6.2 trillion in client assets — would feel conflicted in recommending the product to its clients.

Given that spot Bitcoin ETFs track the price movements of Bitcoin (BTC), Morgan Stanley’s ultra-low fee could spark a fresh fee war in the $83 billion market, putting immediate pressure on rivals to cut costs or risk losing assets.

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Regulatory approval would make Morgan Stanley the first bank to issue a spot Bitcoin ETF, expanding access to Bitcoin exposure for millions of its high-net-worth clients.

“They are the ultimate gatekeepers of rich boomer money,” Balchunas added.

Morgan Stanley previously selected Coinbase and Bank of New York Mellon as the proposed custodians for its Bitcoin ETF.

Morgan Stanley seeking suite of crypto ETFs, banking charter

Morgan Stanley, previously one of the more crypto-hesitant Wall Street firms, filed for the spot Bitcoin ETF in the first week of January, along with a Solana (SOL) ETF.

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Related: Bitcoin traders see 53% odds of sub-$66K BTC by April 24 

It then filed papers for a staked Ether (ETH) ETF later that week, and by the end of the month, the bank appointed one of Morgan Stanley’s longest-standing executives, Amy Oldenburg, to lead its digital asset team.

Source: James Seyffart

Morgan Stanley also applied for a national trust banking charter on Feb. 18, seeking to custody certain digital assets and execute purchases, sales and swaps for clients in addition to staking services.

In October, before the investment bank adopted its institutional crypto strategy, it recommended a 2% to 4% allocation to crypto portfolios for investors. It also allowed its financial advisors to recommend crypto funds to clients with individual retirement accounts (IRAs) and 401(k)s.

Magazine: Bitcoin may face hard fork over any attempt to freeze Satoshi’s coins

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