If you didn't want to self custody, you'd probably want 5-10% MSTR AT THE MOST and rest in FBTC. I like that Fidelity self custodies. You could do less than that in MSTR, as uncle rand0 said, because of operational and leverage risk. But it also has a chance to outperform ₿.
If you wanted to quantify that, you'd want to figure out the risk of bankruptcy and figure out the outperformance and create a model to optimize the ideal % using a model like Kelly Criteria
For example, I ran the Kelly criteria assuming 5% MSTR outperformance and 2% bankruptcy risk and got an optimal allocation of 58%.
But that's kind of a GIGO problem. Who knows outperformance and bankruptcy risk. I think the smarter thing would be to maximize income to buy more bitcoin rather than try to outperform btc. FWIW I own 1-2% MSTR for shits and giggles
JayPowPow / Jay Pow Pow
npub1vj…hvgyr
2024-09-05 16:35:57
in reply to nevent1q…7aym
Author Public Key
npub1vjhfq4mrt2gcjdmv88xe94acdurfgjnq7ec3mcecjj0dkwaxk9ls9hvgyrPublished at
2024-09-05 16:35:57Event JSON
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"content": "If you didn't want to self custody, you'd probably want 5-10% MSTR AT THE MOST and rest in FBTC. I like that Fidelity self custodies. You could do less than that in MSTR, as uncle rand0 said, because of operational and leverage risk. But it also has a chance to outperform ₿. \n\nIf you wanted to quantify that, you'd want to figure out the risk of bankruptcy and figure out the outperformance and create a model to optimize the ideal % using a model like Kelly Criteria\n\nFor example, I ran the Kelly criteria assuming 5% MSTR outperformance and 2% bankruptcy risk and got an optimal allocation of 58%. \n\nBut that's kind of a GIGO problem. Who knows outperformance and bankruptcy risk. I think the smarter thing would be to maximize income to buy more bitcoin rather than try to outperform btc. FWIW I own 1-2% MSTR for shits and giggles",
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