Ecoinmetrics - Investment Ideas - Not Mine & NFA! (Patreon)

First of all the degree of asymmetry clearly stands out. Even with quantifying the SP500 potential upside as almost a sure bet there is no way you’ll mistake that for an asymmetric bet.

Second, you can easily visualize the different characteristics of those bets. Say you look at Bitcoin vs Marathon. Yes, Marathon is a more asymmetric bet than Bitcoin. But if you had some constraints that you want your returns to be realized within 5 years then maybe you’ll go with BTC directly over the miner.

A SP500 bet:

• 8% annualized returns
• over 10 years
• with a 95% confidence on the upside
• gives an expected reward to max loss ratio of 2
• assuming we are taking our losses for a -50% drawdown

A Bitcoin bet:

• 70% annualized returns
• over 5 years
• with a 70% confidence on the upside
• gives an expected reward to max loss ratio of 9
• assuming we are taking our losses for a -50% drawdown

An Ethereum bet:

• 110% annualized returns
• over 5 years
• with a 60% confidence on the upside
• gives an expected reward to max loss ratio of 23.8
• assuming we are taking our losses for a -50% drawdown

A Marathon bet (Bitcoin miner):

• 58% annualized returns
• over 7 years
• with a 60% confidence on the upside
• gives an expected reward to max loss ratio of 15
• assuming we are taking our losses for a -50% drawdown