Some simple risk of ruin math introduced here.
Assumptions:
- The whales have enough capital to try and break the bank without going broke.
- JD is considered "ruined" when the bankroll drops from 30,000 BTC to 5,000 BTC. Considering the panic already seen among investors, this is a very conservative estimate.
With a 1% max bet the risk of ruin is surprisingly high: 18.2%
With a 0.5% max bet it drops drastically to: 3.3%
With a 0.25% max bet it is miniscule: 0.11%
Also, Kelly criterion does apply for the best long-term ROI, but with kelly betting you can never go broke. Just eventually the max bet would get into the satoshis and nobody would play.
This would actually be pretty easy to calculate using the simulator and excel, but I'm feeling pretty lazy now to verify. The one thing I will note is that I think that your assumption about the size of Nakowa's bankroll is likely flawed, and the probability of the house bankrupting should go down significantly if say he only starts with a bankroll of half the size of the house.