Quantum-Exposed Bitcoin Addresses Put 4.12 Million BTC at Risk

Glassnode reports that nearly 4.12 million Bitcoin (BTC) are currently stored in quantum-exposed addresses, highlighting growing concerns about Bitcoin security and wallet management. The analytics firm explained that the exposed BTC mainly results from address reuse, partial spending habits, and custody practices, making the operational risk significantly larger than risks tied to Bitcoin’s original protocol design.

According to Glassnode, Bitcoin’s quantum exposure is divided into two categories: structural exposure and operational exposure. Structural exposure refers to Bitcoin outputs where public keys are automatically visible on-chain. This includes older Pay-to-Public-Key (P2PK) coins from the Satoshi era, bare multisig addresses, and newer Pay-to-Taproot (P2TR) outputs.

Operational exposure, however, stems from how users manage their wallets and transactions. Address formats such as Pay-to-Public-Key-Hash (P2PKH) and Pay-to-Witness-Public-Key-Hash (P2WPKH) normally conceal public keys behind cryptographic hashes. Yet, once a Bitcoin address is reused or partially spent, the remaining balance becomes vulnerable because the public key is revealed on-chain.

Glassnode estimates that quantum-exposed Bitcoin now represents 30.2% of the total BTC supply in circulation. The report also found that operational exposure is 2.1 times greater than structural exposure, emphasizing that poor wallet management practices remain a major security concern for Bitcoin holders.

Cryptocurrency exchanges account for the largest share of operationally exposed BTC, holding approximately 1.66 million BTC, or nearly 40% of the exposed supply. Exposure levels differ greatly between exchanges. Coinbase reportedly has only 5% of its holdings exposed, while Binance is close to 85%, and Bitfinex reaches 100%.

The report further noted that sovereign Bitcoin wallets linked to the United States, United Kingdom, and El Salvador currently show zero exposure. Glassnode added that better address rotation practices and avoiding address reuse could significantly reduce Bitcoin’s operational security risks without requiring major protocol upgrades like Bitcoin Improvement Proposal 360 (BIP-360).