Term
Kelly Criterion
The mathematically optimal stake size for a known edge.
Definition
The Kelly Criterion calculates the stake fraction that maximises the geometric growth rate of a bankroll. The classic formula is f* = (bp − q) / b, where b is decimal odds minus 1, p is win probability, and q = 1 − p. Most disciplined bettors use fractional Kelly (¼ to ½) to reduce variance.
Example
Edge of +4.4% on decimal odds of 2.10. Full Kelly stakes f* = (1.10 × 0.52 − 0.48) / 1.10 ≈ 8.5% of bankroll. Quarter-Kelly (recommended) is ~2.1% — comfortably under the 3% per-bet cap that Crypto Bet Capital enforces.
Why it matters
Over-staking blows up bankrolls even with a real edge. The 3% per-bet rule on every Challenge tier exists precisely to enforce Kelly-style discipline.
Related terms
Edge
The percentage difference between your estimated probability of an outcome and the sportsbook’s implied probability from the offered odds.
Expected ValueEV
A probability-weighted average return — the long-run profit or loss per unit staked if the same bet were placed indefinitely.
Variance
The dispersion of bet outcomes around their expected value — high variance means results swing wildly even when long-run +EV holds.
Drawdown
The percentage decline from a bankroll’s highest value to its current value — measured per phase and per day in the Crypto Bet Capital ruleset.
Last updated ·