30 Years Wall Street Veteran: The Bitcoin Insights Learned from Horse Racing, Poker, and Investment Legends

I do not focus on the price of Bitcoin itself, but rather on the position allocation of the group of people I am most familiar with, namely those who hold substantial wealth, are well-educated, and have successfully achieved capital compound interest for decades.

Written by: Jordi Visser

Compiled by: Luffy, Foresight News

When I was five years old, my father took me to the Monticello racetrack in northern New York for the first time.

He handed me a horse racing guide and began to teach me how to interpret the information on it: past performance, jockey records, track conditions. Those numbers and symbols were like a mysterious language to me.

For many years thereafter, we often went there. That racetrack became his “classroom.” He never asked me to “pick the winner,” but was always guiding me to focus on another question: Is there betting value in this race?

Every time I finish predicting the odds for a match, he always asks me about the basis of my assessment. Then, based on his own experience, he points out the information I missed or the dimensions I should have explored more deeply. He taught me:

Identify patterns from horse racing results

Weighing the weights of different influencing factors

Provide odds that are realistic rather than based on speculation.

Most importantly, continuously reassess the 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 more than 30 years working on Wall Street.

Today, this analytical framework has allowed me to identify the most undervalued betting target in my career: Bitcoin.

When I analyzed Bitcoin using the horse racing odds method my father taught me, what I saw was an asset with a 3:1 odds, but many top smart people I know gave it odds of 100:1, even considering it worthless.

This valuation discrepancy is not only vast but also an excellent opportunity that one rarely encounters in a career.

Learn to bet on the future

The method my father taught me is rigorous rather than casual. Before setting odds for any horse, I must put in the necessary effort. I treat studying the horse racing guide as a homework assignment:

The past performance of horses under different track conditions

Rider skilled in specific scenarios

Changes in the competition level of horses, equipment, and predictions of the event rhythm.

Lineage and Training Patterns

He even taught me to remain skeptical and not easily trust human factors. Not every horse will give its all; some horses are “conserving energy” for subsequent events, and some trainers have fixed tactical routines. All these factors must be taken into account.

Then to the actual betting phase.

I have learned to observe the timing of smart money entering the market, as well as the fluctuations in odds in the last few minutes before the race. But there is only one core rule: you must write down your predicted odds before checking the betting display.

This is not about making me guess blindly, but rather about constructing a sound logic for my own 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 explain my reasoning will he allow me, as a newcomer, to observe the public betting situation.

It was also at this time that a wonderful opportunity appeared. Sometimes I predicted a horse with odds of 5:1, but the actual odds on the betting screen were 20:1.

This advantage does not stem from being smarter than others, but rather because most people who set the odds haven't done their research, and the biggest opportunities lie in their oversights.

He repeatedly instilled another key principle in me: if the odds of a match fully reflect its value, then just give up on betting. “There will always be the next match.”

Choosing to stay put when there is no advantage is one of the hardest disciplines to master in the market, and it is a lesson that many investors never learn.

betting-style thinking

Many years later, I realized that the method my father taught me was actually a professional methodology studied for decades by professional poker players and decision theorists.

Annie Duke's “Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts” provides a theoretical framework for the experiences I've learned at the racetrack. Her core insight is simple yet profound: every decision is a bet on an uncertain future; the quality of a decision must be judged separately from the outcome itself.

You may have made an extremely wise decision, only to lose in the end. Even with a reasonable valuation, that horse with 5:1 odds has an 80% chance of losing the race.

What really matters is:

Is the decision-making process rigorous?

Is the odds setting reasonable and justified?

Do you have an advantage when placing bets?

A few years ago, I had a face-to-face conversation with Annie and told her that her book aligns with the principles my father taught me at the racetrack. I have always known that this logic has helped my investments, and it has even shaped my way of thinking about health and happiness.

What we talked about more was her background in psychology, rather than poker or the book itself, because all of this is essentially interconnected. This framework is not only applicable to poker or investment, 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, learning to make decisions with probabilistic thinking and separating the decision-making process from the results is key to achieving long-term progress.

Munger: The market is like a racetrack.

Charlie Munger once proposed a viewpoint that connects all logic together: the stock market is essentially a betting system for horse racing.

In the betting pool system, the price is not determined by any objective intrinsic value, but rather 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 indicate the proportion of the betting amount for each horse in relation to the total betting pool.

The operational logic of the market is the same.

Stock prices, bond yields, and Bitcoin valuations are not determined by TV commentators or social media narratives, but by the actual flow of capital.

When I look at Bitcoin from this perspective, the real odds are never reflected in the statements of a few wealthy individuals on CNBC, but rather in the relative size of various asset pools:

Comparison of Bitcoin and fiat currency

Comparison of Bitcoin and Gold

Comparison of Bitcoin and Global Household Wealth

These ratios and relative performance trends reflect the true opinions of collective bettors, unrelated to public statements.

Interestingly, if someone says Bitcoin is worthless, from the perspective of betting in a prize pool, they are not entirely wrong.

Despite the impressive performance of Bitcoin and the continuous growth of its user base, as well as a decade of global monetary experiments and fiat currency depreciation, the scale of Bitcoin remains very small. Compared to traditional value storage tools, the capital allocated to Bitcoin is negligible.

In terms of betting on colorful pools, the public has already shown their attitude through action: they have hardly bet on Bitcoin.

And this is the starting point of my odds prediction.

The Power of Positions: Jones, Druckenmiller

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 sizing 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 the timing of entry, but positions can tell you all the risks.”

Once everyone stands on the same side of the trade, marginal buyers will disappear. Market trends never depend on opinions, but rather on passive buying and selling behavior.

This aligns with Munger's insights on color pool betting. The truly critical factor is not just the size of the fund 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, that is, those who hold the most capital, generally 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 easier it is to view Bitcoin as a scam.

The more wealth you have, the greater the potential loss when betting on Bitcoin.

That's why I never talk about Bitcoin at dinner parties on Wall Street; it's as sensitive a topic as politics or religion.

But the experiences of Jones and Druckenmiller tell us: you do not need to determine the future of Bitcoin.

You just need to realize that the extremely low position allocation of global capital holders is creating an asymmetrical opportunity that they have been exploiting throughout their careers.

Predicting Bitcoin like forecasting a horse race.

So, how do I predict the odds of Bitcoin?

I started with the first lesson my father taught me: do your homework first, then look at the market odds.

Bitcoin was born in an era of exponential technological growth, emerging from the global financial crisis, stemming from people's distrust of government and centralized control.

Since its birth:

The scale of government debt is growing explosively.

Traditional system repair solutions have been exhausted.

The future development path will heavily rely on technological innovations such as artificial intelligence.

I believe that artificial intelligence is a force that accelerates deflation, but paradoxically, it will further pressure governments to increase spending and accelerate currency devaluation, especially in the context of the global competition in artificial intelligence with China.

We are moving towards an era of material abundance, but this path will disrupt almost all large institutions.

Those companies that are built on code and hold current power and wealth have now been forced to act like governments:

“Printing money” in the form of capital expenditures for large-scale data centers.

Carry more debt

Advance spending to seize future dominance.

Bears follow the bubble, I follow the despair of the rich.

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 artificial intelligence agents, and this is precisely where the value of network effects lies.

But Bitcoin is no longer just an innovation; it has evolved into a belief system.

Innovation may be disrupted by better innovations, but the operating logic of belief systems is completely different. Once a critical scale is reached, its performance resembles more 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.

Then, I will go to see the “betting screen.”

I am not focused on the price of Bitcoin itself, but rather on the position allocation of the group of people I am most familiar with, namely those who hold large amounts of wealth, are well-educated, and have successfully achieved capital compound interest through asset allocation for decades.

Most of them still set the odds for Bitcoin at 100:1 or even lower, with many outright stating it is worthless. Their portfolios also confirm this view: either they have no allocation to Bitcoin at all or the allocation is extremely low.

The gap between me and them in odds judgment is enormous.

According to Druckenmiller's framework, this is exactly a combination of “high-quality targets + extremely low position allocation,” and this is precisely the moment that is most worth following.

Control the betting scale to avoid losing everything.

Even if the odds are favorable and the position allocation is extremely low, it does not mean that one can act recklessly.

My father never allowed me to bet all my principal on a horse with odds of 20:1, and this principle applies here as well.

Druckenmiller has a simple rule of thumb: high-quality assets + very low positions = increase bets, but “increase” should always be tied to the strength of conviction and risk tolerance.

For most people, this tolerance is determined by two factors that are rarely mentioned in Bitcoin discussions:

Age and Investment Duration

Future expenditure demands and obligations

If you are still young and have decades of human capital, your ability to cope with volatility is vastly different from those in their 70s who need to withdraw retirement funds from their portfolios. Experiencing a 50% drawdown at 30 is a growth lesson; while the same drawdown at 70 could turn into a crisis.

Therefore, I believe that the allocation ratio of Bitcoin should follow the gradient principle:

The longer the investment period, the more future income, and the less short-term debt → the allocation ratio can be reasonably increased.

The shorter the investment period, the fixed the income, and the existence of actual short-term expenditure obligations (children's tuition, medical expenses, pension withdrawals, etc.) → the allocation needs to be more conservative.

In fact, the industry is gradually moving towards a new normal. Institutions like BlackRock and major banks have now publicly suggested that 3% to 5% of funds in a diversified portfolio can be allocated to Bitcoin or digital assets. I do not think this number is worth blindly copying for everyone, but it is a useful reference — it indicates that the focus of market discussions has shifted from “zero allocation” to “how much should be allocated.”

My view is clear: everyone needs to do their own homework and come up with a configuration ratio that suits them.

But I also believe that the “recommended allocation range” proposed by institutions will not remain unchanged. Over time, the exponential disruptive development of artificial intelligence makes predicting traditional cash flows for the next three years even more difficult, and asset allocators will be forced to seek growth opportunities in a world where business models are continuously rewritten by algorithms.

At that time, the appeal of Bitcoin will not be limited to digital gold, but will become a presence akin to a “faith-based moat”, rather than a traditional “competitive growth moat”.

The competitive growth moat relies on code, products, and business models, which can easily be disrupted by better code, products, and new entrants. In the era of artificial intelligence, the lifespan of such moats will be significantly shortened.

The belief in the moat is built on an ever-solidifying collective narrative, representing a collective belief in the value of a certain currency asset in an era of currency depreciation and accelerated technological iteration.

As artificial intelligence accelerates its development, the difficulty of selecting the next top software or platform winner will increase. I anticipate that more asset allocators will shift part of their “growth asset positions” towards targets that build advantages based on network effects and collective beliefs, rather than those in industries that have weakened advantages under the impact of artificial intelligence. The exponential development of artificial intelligence is continually compressing the lifespan of the innovation moat. However, Bitcoin's faith moat possesses a time defensiveness - the faster artificial intelligence develops, the stronger it becomes, just like a hurricane sweeping across warm water. It is the purest trading target in the era of artificial intelligence.

Therefore, there is no configuration number that applies to everyone, but the framework is universal:

The initial position should be small enough to ensure that even in the event of a 50% to 80% drawdown, the future will not be compromised.

Determine the position based on age, investment duration, and actual needs.

It is important to recognize that as artificial intelligence makes it more difficult to predict traditional growth targets, and as the faith-based moat of Bitcoin continues to deepen, the “acceptable allocation ratio” of Bitcoin in institutional portfolios is likely to gradually increase.

You wouldn't bet your entire fortune on an asset with a 3:1 odds, but you also shouldn't treat such an opportunity as a small bet of 5 dollars.

Eternal Wisdom Beyond Bitcoin

Recalling those afternoons at Monticello Racecourse, I can't remember the specific events or horses, only that analytical framework.

My father never taught me how to pick a champion; what he taught me was a way of thinking that can endure decades of compound interest growth:

Do your homework first, then look at the market odds.

Establish an independent probability assessment system, rather than blindly following the masses.

Follow position allocation and capital flow, rather than just focusing on narratives and headlines.

Choose to wait and see when there is no advantage.

When your research conclusions are vastly different from the consensus and the position allocation is very low, decisively increase your bet.

The racetrack taught me how to predict odds, Annie Duke taught me to make decisions using betting thinking and to separate processes from outcomes, Munger made me realize that the market is essentially a betting pool system, while Jones and Druckenmiller taught me that position sizing is sometimes more important than valuation.

Looking at the current Bitcoin through this framework, it is like the horse that the father described as “should actually be 3 to 1, but is marked as 20 to 1”. What is even more special is that there are very few wealthy investors betting on it.

My father often said that not betting when you have no advantage and betting boldly when you do have 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 allocation are completely aligned.

The public will eventually enter the market, they always do. By that time, the odds will be vastly different. **$BAND **$ZEC **$CAKE **