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.
I don't think this is right. Even if the gambler has infinite capital the probability I get is 2.8% to take 25k out of 30k.
With a max bet of 0.5% I get 0.08%.