I would not want to overly complicate any formula, including that I would not proclaim that your BTC has to be in profits before you might want to allocate up to 10% of your bitcoin holdings into trading, shitcoins and/or gambling. People have choices, including choices to gamble and get into shitcoins, and surely many of us in this thread and many of us who are focusing on bitcoin suggest that people should not get into shitcoins at all, and they should focus on bitcoin first, yet there are people who cannot resist the temptation to gamble, trade and/or get into shitcoins, and if they could at least limit the amount that they put into shitcoins to be less than 10% of the size of their bitcoin holdings and/or less than 10% of the amount that they might be regularly DCAing into bitcoin... So if they have a budget to be able to DCA $100 per week into bitcoin, then they could put $10 of that into shitcoins/gambling and/or trading... and hopefully also they are not trading. If their shitcoins/gambling and/or trading is not profitable, they are not coming back to BTC to withdraw another 10%.. They are then stuck with the 10% of the BTC DCA amount each pay period or however, it is that they are employing their DCA payments.
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I agree that shit are shit coins, but there are shittier coins and nightmare shitty coins. The worst you can do is to put money into these coins that are pretty dead already, have low liquidity and you do it because you hope that for some stupid reason these things make a dead cat bounce. From my experience what it does is in case it works once, it motivates people to do it again and they do it for so long that do get stuck because they exaggerate it.
Best case is no money flows into shit coins at all. I have often times realized that so many of these shit coins advertise their low fee transactions, but the only reason those fees are sometimes lower is that nobody really wants to use those coins. TRX is an example.
Now I can't recall whetheryou have said this before @JayJuanGee, but are there coins that you would not necessarily put on the shit coin list other than bitcoin?
I do not invest in any other coins, but I have had occasions in the past where using one of those coins as an intermediary did make sense or was necessary. For instance, paying for a VPN service or something like this can sometimes be cheaper/easier if you use a shit coin.
Several years ago I still enjoyed researching other coins, but I stopped doing that almost entirely at some point as the chance of finding some good tech sadly was/is close to zero. At the end of the day all those developers try to set up an architecture that funnels money straight into their pockets.