I am not focused on the price of Bitcoin itself, but rather on the position allocations of the group of people I am most familiar with—those who hold significant wealth, are well-educated, and have successfully achieved capital compounding for decades.
Written by: Jordi Visser
Translated by: Luffy, Foresight News
When I was five years old, my father took me for the first time to the Monticello Racecourse in upstate New York.
He handed me a racing guide and began teaching me how to interpret the information on it: past performance, jockey records, track conditions. Those numbers and symbols felt like a mysterious language to me.
For many years afterward, we often went there. That racecourse became his "classroom." He never asked me to "pick the winner," but always guided me to focus on another question: Is there betting value in this race?
Whenever I completed an odds prediction for a race, he would ask me about the basis of my assessment. Then, using his experience, he would point out the information I had overlooked or the dimensions I should have explored further. He taught me to:
Identify patterns from horse racing records
Weigh the importance of different influencing factors
Provide realistic odds rather than those based on speculation
Most importantly, continuously reassess odds based on new information
He inadvertently trained me to use Bayesian methods to predict the probability of future outcomes. This skill has been applied in every decision of my life, especially during my 30-plus years on Wall Street.
Today, this analytical framework has led me to identify the most undervalued betting target of my career: Bitcoin.
When I analyze Bitcoin using the horse racing odds methods my father taught me, I see an asset with 3:1 odds, while many of the top smart people I know have assigned it 100:1 odds, even considering it worthless.
This valuation discrepancy is not only vast but also represents a rare opportunity that one seldom encounters in a career.
Learning to Bet on the Future
The method my father taught me is rigorous, not casual. Before setting odds for any horse, I had to do my homework. I treated studying the racing guide as homework:
The past performance of horses under different track conditions
Jockeys who excel in specific scenarios
Changes in the horse's competition level, equipment, and race pace predictions
Bloodlines and training patterns
He even taught me to remain skeptical and not easily trust human factors. Not every horse will give its all; some are "conserving energy" for future races, and some trainers have fixed tactical routines. All these factors must be considered.
Then came the actual betting phase.
I learned to observe the timing of smart money entering the market and the fluctuations in odds during the last few minutes before the race. But there is only one core rule: I must first write down my predicted odds before looking at the betting display.
This was not about making random guesses but about constructing a sound logic for my judgment. For example, why should this horse have a 20% chance of winning (corresponding to 5:1 odds) rather than 10% (10:1) or 5% (20:1). Only after completing this homework and being able to clearly articulate my reasoning would he allow me, as a novice, to look at the public betting situation.
It was at this point that wonderful opportunities arose. Sometimes, I would predict a horse with 5:1 odds, but the actual odds on the betting screen would be 20:1.
This advantage did not come from being smarter than others but from the fact that most people setting the odds had not done their homework, and the biggest opportunities lay in their oversights.
He also repeatedly instilled another key principle in me: If the odds of a race fully reflect its value, then simply forgo betting. "There will always be the next race."
Choosing to stand still when there is no advantage is one of the hardest disciplines to master in the market and a lesson many investors never learn.
Betting-Style Thinking
Years later, I realized that the method my father taught me is actually a professional methodology studied by professional poker players and decision theorists for decades.
Annie Duke's "Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts" provided a theoretical framework for the experiences I learned at the racetrack. Her core insight is simple yet profound: all decisions are bets on an uncertain future; the quality of a decision must be judged separately from the outcome itself.
You may make an extremely wise decision and still lose in the end. Even if the valuation is reasonable, that horse with 5:1 odds has an 80% chance of losing the race.
What truly matters is:
Whether the decision-making process is rigorous
Whether the odds setting is well-founded
Whether you have an advantage when placing bets
A few years ago, I had a face-to-face conversation with Annie, telling her that her book and the principles my father taught me at the racetrack were in alignment. I always knew this logic helped my investments; it even shaped my thinking about health and happiness.
We discussed more about her background in psychology rather than poker or the book itself, as all of this is fundamentally interconnected. This framework is not only applicable to poker or investing but also to decision-making in all fields when information is incomplete.
But the core insight is consistent: we live in a world of incomplete information, and learning to make decisions using probabilistic thinking while separating the decision-making process from the outcome is key to achieving long-term progress.
Munger: The Market is Like a Racecourse
Charlie Munger once proposed a viewpoint that ties all the logic together: the stock market is essentially a betting pool system.
In a betting pool system, prices are not determined by some objective intrinsic value but are shaped by the collective betting behavior of all participants. The odds on the betting screen do not tell you how much a horse "is worth," but rather the proportion of each horse's betting amount to the total betting pool.
The logic of market operation is the same.
Stock prices, bond yields, and Bitcoin valuations are not determined by TV commentators or social media narratives but are defined by the actual flow of capital.
When I view Bitcoin from this perspective, the real odds are never the statements of a few wealthy individuals on CNBC but are reflected in the relative scale of various asset pools:
Bitcoin compared to fiat currency
Bitcoin compared to gold
Bitcoin compared to the total global household wealth
These ratios and relative performance trends reflect the true views of collective bettors, unrelated to public statements.
Interestingly, if someone says Bitcoin is worthless, from the perspective of the betting pool, they are not entirely wrong.
Despite Bitcoin's impressive performance, continuous user growth, and the global monetary experiment and fiat currency devaluation over the past decade, Bitcoin's size remains small. Compared to traditional value storage tools, the capital allocated to Bitcoin is minuscule.
In betting pool terms, the public has shown their attitude through action: they have hardly bet on Bitcoin.
And this is precisely the starting point for my odds predictions.
Jones, Druckenmiller, and the Power of Positioning
The two top macro traders in history—Paul Tudor Jones and Stanley Druckenmiller—have a core principle in their careers that most investors overlook: position allocation is often more important than fundamentals.
Jones once said, "The public is always one step behind." Druckenmiller's view is even sharper: "Valuation cannot tell you when to enter; positioning can tell you all the risks."
Once everyone is on the same side of the trade, marginal buyers will disappear. Market movements are never determined by opinions but by passive buying and selling behavior.
This aligns with Munger's insight about betting pools. The truly critical factors are not just the size of the capital pool but also:
Who is betting
Who is watching
When I analyze Bitcoin from this perspective, a noteworthy phenomenon emerges: the wealthiest group in the fiat currency system, those who hold the most capital, largely do not have a favorable view of Bitcoin.
Demographic data clearly shows:
The older you are, the lower the probability of holding Bitcoin
The higher the level of traditional financial education, the more likely you are to view Bitcoin as a scam
The more wealth you have, the greater the potential loss from betting on Bitcoin
Because of this, I never discuss Bitcoin at dinner parties on Wall Street; it is as sensitive a topic as politics or religion.
But the experiences of Jones and Druckenmiller tell us: you do not need to be certain about Bitcoin's future.
You only need to realize that the extremely low position allocation of global capital holders is creating an asymmetrical opportunity they have been leveraging throughout their careers.
Predicting Bitcoin Like Predicting a Horse Race
So, how do I predict Bitcoin's odds?
I start from the first step my father taught me: do your homework first, then look at the market odds.
Bitcoin was born in an era of exponential technological growth; it emerged from the global financial crisis, stemming from people's distrust of government and centralized control.
Since its inception:
Government debt has exploded in scale
Traditional system repair solutions have been exhausted
Future development paths will heavily rely on technological innovations like artificial intelligence
I believe that artificial intelligence is a force accelerating deflation, but paradoxically, it will further compel governments to increase spending and accelerate currency devaluation, especially in the context of the global competition in AI with China.
We are moving toward an era of material abundance, but this path will disrupt almost all large institutions.
Those companies built on code, holding current power and wealth, are now forced to act like governments:
"Printing money" in the form of massive capital expenditures on data centers
Taking on more debt
Pre-spending to seize future dominance
The shorts focus on bubbles, while I focus on the despair of the wealthy.
Ultimately, artificial intelligence will also make such expenditures deflationary, squeezing corporate profits and triggering large-scale wealth redistribution.
In such a world, the financial regulatory framework needs to keep pace with the speed of digital currencies operated by AI agents, which is the value of network effects.
But Bitcoin has long since evolved beyond just an innovation; it has transformed into a belief system.
Innovations may be disrupted by better innovations, but the operational logic of belief systems is entirely different. Once a critical scale is reached, its performance resembles that of a religion or social movement rather than an ordinary commodity.
When I assign probabilities to different future paths for Bitcoin, its risk-reward ratio is approximately between 3:1 and 5:1, which includes risk factors such as quantum computing threats, shifts in government support, and the emergence of new competitors in the cryptocurrency space.
Only then do I look at the "betting screen."
I am not focused on the price of Bitcoin itself, but rather on the position allocations of the group of people I am most familiar with—those who hold significant wealth, are well-educated, and have successfully achieved capital compounding for decades.
Most of them still assign Bitcoin 100:1 odds or even lower, with many outright stating it is worthless. Their investment portfolios also reflect this view: either they have no allocation to Bitcoin at all or an extremely low allocation.
The gap in our odds judgments is enormous.
According to Druckenmiller's framework, this is precisely a combination of "high-quality target + extremely low position allocation," which is exactly the moment worth paying attention to.
Controlling Bet Size to Avoid Total Loss
Even with favorable odds and extremely low position allocation, it does not mean one can act recklessly.
My father never let me bet all my capital on a horse with 20:1 odds, and this principle applies here as well.
Druckenmiller has a simple rule of thumb: high-quality target + extremely low position = increase the bet, but "increase" should always be linked to the strength of conviction and risk tolerance.
For most people, this tolerance is determined by two factors that are rarely mentioned in discussions about Bitcoin:
Age and investment horizon
Future spending needs and obligations
If you are still young and have decades of human capital ahead, your ability to withstand volatility is vastly different from someone in their 70s who needs to draw retirement funds from their portfolio. Experiencing a 50% drawdown at age 30 is a growth lesson; the same drawdown at age 70 could turn into a crisis.
Therefore, I believe the allocation to Bitcoin should follow a gradient principle:
The longer the investment horizon, the more future income, and the fewer short-term liabilities → the allocation can be reasonably increased
The shorter the investment horizon, fixed income, and the presence of real short-term spending obligations (children's tuition, medical expenses, retirement withdrawals, etc.) → the allocation should be more conservative
In fact, the industry is gradually moving toward a new normal. Institutions like BlackRock and major banks now openly suggest allocating 3% to 5% of diversified portfolios to Bitcoin or digital assets. I do not believe this number should be blindly adopted by everyone, but it serves as a useful reference—indicating that the focus of market discussions has shifted from "zero allocation" to "how much to allocate."
My view is clear: everyone needs to do their homework and arrive at an allocation ratio that suits them.
However, I also believe that the "recommended allocation range" proposed by institutions will not remain static. Over time, the exponential disruptive development of artificial intelligence makes predicting traditional cash flows for the next three years increasingly difficult, forcing asset allocators to seek growth opportunities in a world where business models are continuously rewritten by algorithms.
At that time, Bitcoin's appeal will not be limited to being digital gold; it will become a near "faith-based moat," rather than a traditional "competitive growth moat."
Competitive growth moats rely on code, products, and business models, which can easily be disrupted by better code, products, and new entrants. In the age of artificial intelligence, the lifespan of such moats will be significantly shortened.
In contrast, a faith-based moat is built on a solidifying collective narrative, representing a collective belief in the value of a particular currency asset in an era of currency devaluation and rapid technological iteration.
As artificial intelligence accelerates, the difficulty of selecting the next top software or platform winner will increase, and I expect more asset allocators to shift part of their "growth asset positions" toward targets that build advantages based on network effects and collective belief, rather than those in industries with weakened advantages under the impact of artificial intelligence. The exponential development of artificial intelligence is continuously compressing the lifespan of innovation moats. However, Bitcoin's faith-based moat possesses time defensiveness— the faster artificial intelligence develops, the more powerful it becomes, like a hurricane sweeping through warm waters. It is the purest trading target in the age of artificial intelligence.
Therefore, there is no single allocation number that applies to everyone, but the framework is universal:
The initial position should be small enough to ensure that even a 50% to 80% drawdown will not jeopardize the future
Determine positions based on age, investment horizon, and actual needs
Recognize that as artificial intelligence makes traditional growth targets harder to predict, and as Bitcoin's faith-based moat deepens, the "acceptable allocation ratio" for Bitcoin in institutional portfolios will likely gradually increase
You wouldn't bet your entire fortune on a target with 3:1 odds, but you also shouldn't treat such an opportunity as a small $5 wager.
The Eternal Wisdom Beyond Bitcoin
Reflecting on those afternoons at Monticello Racecourse, I can't recall specific races or horses, only that analytical framework.
My father never taught me how to pick a winner; he taught me a way of thinking that can endure decades of compounding growth:
Do your homework first, then look at market odds
Establish an independent probability assessment system rather than blindly following the crowd
Focus on position allocation and capital flows, rather than just narratives and headlines
Choose to observe when there is no advantage
When your research conclusions diverge significantly from the consensus and the target's position allocation is extremely low, decisively increase your bet
The racetrack taught me how to predict odds, Annie Duke taught me to make decisions using a betting mindset and to separate process from outcome, Munger made me understand that the market is a betting pool system, and Jones and Druckenmiller taught me that position allocation can sometimes be more important than valuation.
Viewing Bitcoin through this framework, it resembles the horse my father described as "should be 3 to 1 but is marked as 20 to 1," and more uniquely, very few wealthy investors are betting on it.
My father often said that not betting when there is no advantage and betting boldly when there is an advantage are equally important.
At this moment, it seems to me that Bitcoin is in one of those rare moments: research conclusions, odds predictions, and position allocations are all perfectly aligned.
The public will eventually enter the market; they always do. And by then, the odds will have changed dramatically.
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