Optimal sizing, psychology, and Kelly insights

What does it take to build four top-decile crypto funds in one of the most volatile asset classes on earth? In this episode, I talk with Rennick Palley, Founder of Stratos, about how he approaches crypto investing with a disciplined, mathematically grounded framework. We break down how Stratos constructs top-performing venture and liquid portfolios, why crypto is shifting from momentum-driven trends to fundamentals, how to size positions without blowing up, and why Bitcoin and gold are behaving the way they are in today’s macro environment. Rennick also shares his philosophy on decisiveness, conviction, and avoiding the costly mistakes investors make when they hesitate.

Highlights:

• How Stratos generated four top-decile crypto venture funds
• Why fund size matters more than most crypto investors admit
• Crypto’s evolution from momentum to fundamentals-driven investing
• How to size early-stage positions and avoid portfolio blowups
• Why the smartest investors focus on: “Just don’t screw this up”
• The future of Bitcoin as digital gold
• Why gold is outperforming Bitcoin this year — and why that may change
• What on-chain data reveals about global truth systems
• Why most crypto VC funds underperform the benchmark (just like traditional VC vs. Nasdaq)
• How institutions should think about crypto allocation and volatility
• The behavioral cost of hesitation and the danger of inaction
• Why crypto provides “free leverage” — and why that makes risk management essential
• Thoughts on government seizure scenarios, custody, and ETF risk
• Meme coins, debasement psychology, and the role of speculation
• How investors can compound returns across cycles without blowing up

Guest Bio:

Rennick Palley is the Founder of Stratos, an investment firm he launched in 2016 after entering the crypto markets. Under his leadership, Stratos has built multiple top-decile venture funds and a liquid strategy designed to compound capital across highly volatile cycles. Before founding Stratos, Rennick worked as a Research Associate at Sanders Capital, a $75 billion global equity manager known for its fundamental, value-driven approach. He holds dual Bachelor’s degrees in Applied Mathematics and Mechanical Engineering from Southern Methodist University and a Master’s in Quantitative Finance from the Massachusetts Institute of Technology. Rennick blends value-investing discipline, quantitative rigor, and crypto-native insight, making him one of the most analytical and thoughtful investors in digital assets today.

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X/Twitter: @dweisburd LinkedIn: https://www.linkedin.com/in/dweisburd/ Weisburd Capital: https://www.weisburdcapital.com/

Stay Connected with Rennick Palley:

X/Twitter: https://x.com/RennickPalley Stratos: https://www.stratos.xyz/

Questions or topics you want us to discuss on How I Invest? Email us at david@weisburdcapital.com.

Disclaimer:

This podcast is for informational purposes only and does not constitute investment, financial, legal, or tax advice. Nothing in this episode should be interpreted as an offer to buy or sell any securities or to participate in any investment strategy. All opinions expressed by the host and guests are their own and do not represent the views of Weisburd Capital. Participants may hold positions or have financial interests in the companies, funds, or investments discussed. Any references to specific investments are for illustrative purposes only. Investing involves risk, including the potential loss of capital. Past performance is not indicative of future results, and any forward-looking statements are subject to risks and uncertainties. Any third-party data or opinions have not been independently verified. Listeners should conduct their own research and consult their own advisors before making any investment decisions.

(0:00) Introduction (2:00) Key principles in crypto venture investing (4:18) Analyzing large outcome clustering in crypto (5:12) Momentum vs. value in evaluating crypto wins (8:14) The future of information and crypto as a hedge (12:22) Historical parallels and Bitcoin's potential challenges (17:45) Strategies for a potential Bitcoin confiscation scenario (21:01) Debating Bitcoin's future valuation and effects of forced sales (27:10) Insights from Rennick Palley and liquid crypto strategies (31:34) Comparing crypto to traditional endowment strategies (33:06) Sector importance and risk management in crypto (39:47) Systematic decision-making and the role of an engineering background (43:43) Portfolio construction and institutional crypto allocation (45:52) Transitioning from venture to liquid crypto investments (49:08) The benefits of illiquidity in alternative investments (50:31) Fund liquidity and managing investor relationships (53:10) Determining the optimal portfolio size for Bitcoin (54:13) Utilizing leverage in crypto investing (57:12) Guidance for newcomers to crypto investing (59:45) Closing remarks