El Salvador Moves $680M Bitcoin Reserve to 14 Wallets Over Quantum Fears

Key Insights:

• El Salvador moved 6,274 Bitcoin valued at 680M to 14 wallets to counter quantum risks.
• Each new address now holds up to 500 BTC, reducing exposure from single-wallet storage.
• Quantum computing remains years away, but ONBTC says precautions protect reserves long-term.

El Salvador has shifted its entire national Bitcoin reserve of more than $680 million into 14 separate wallet addresses. The transfer was confirmed by the country’s National Bitcoin Office (ONBTC).

It stated that the move is designed to reduce risks posed by emerging quantum computing technology.

Redistribution of El Salvador Bitcoin Holdings

The Central American nation previously held its 6,274 Bitcoin in a single wallet address. According to blockchain data, the funds were transferred on Friday into 14 new addresses. Each wallet now holds up to 500 Bitcoin, ensuring that no single address contains the full reserve.

ONBTC explained that the strategy limits exposure by dividing holdings across multiple wallets. The strategy is supposed to minimize possible losses if quantum computing advances to a level where it can break the existing cryptographic protection of Bitcoin.

Quantum Threats and Cryptography Risks

Bitcoin uses elliptic curve cryptography (ECDSA) to secure funds. When Bitcoin is used out of an address, its public key becomes visible. If a sufficiently powerful quantum computer running Shor’s algorithm emerges, it could theoretically derive the private key from the public one.

Project Eleven, a quantum research company, warned earlier this year that over six million Bitcoins could be vulnerable if quantum technology progresses to that level. However, experts note that no existing quantum computer has managed to crack even the simplest cryptographic systems at scale.

Industry Reactions and Expert Views

Some industry figures praised El Salvador’s precautionary step. Mononaut, founder of Mempool, confirmed that the funds were split across 14 fresh addresses. It eliminated the issue of continuous address reuse.

ONBTC added that transparency would still be maintained through a public dashboard tracking the balances.

Despite the caution, many researchers emphasize that the quantum threat remains distant. No quantum computer has demonstrated the ability to break Bitcoin’s 256-bit encryption.

Michael Saylor, executive chairman of Strategy, stated in June that should the threat materialize, Bitcoin’s core developers and hardware manufacturers would implement upgrades to protect the network.

Broader Context of Bitcoin Strategy

El Salvador continues to buy one Bitcoin per day, adding gradually to its reserve. At the time of the transfers, its total holdings exceeded 6,280 Bitcoin, valued at more than $680 million. The country adopted Bitcoin as legal tender in 2021 and remains the only nation to do so officially.

Nevertheless, its policy on Bitcoin is still questioned. In July, the International Monetary Fund (IMF) reported that El Salvador had not recorded any new purchases since February, although ONBTC was still updating on social media on the acquisitions.

In December 2024, the country also signed a funding agreement with the IMF for $1.4 billion, with the terms allegedly stating some restrictions on its Bitcoin operations.

Bitcoin Price Prediction

Conversely, analyst Merlijn The Trader found the Bitcoin price action to be developing a definite instance of a double top on the daily chart. He observed that the neckline is at the level of $112,000, which is a major support to traders.

A consistent breach at this level may trigger the bearish signal of below $100,0000, indicating a correction stage.

Nevertheless, the analyst pointed out that a recovery of $112,000 would turn the story into a bullish one. The momentum above this point might be sustainable and overturn the bearish views, as the short sellers would be forced to pull out and push BTC toward $124,000 or more.

The setup, according to the analyst, highlighted an inflection point where Bitcoin’s next move could be sharp and decisive in either direction.

At press time, the crypto was trading at $108,669, down 1% on the day. Bitcoin’s market capitalization stood at $2.16 trillion, with 24-hour trading volumes rising 14% to $73.28 billion.

Disclaimer

This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.