Planning to start a series analyzing the hidden shortcomings that institutional investors can't hide.

Today, let's talk about the first one: funds find it very difficult to hold an empty position, which is almost a core flaw in institutional investing.

Here's the situation—most fund agreements specify that the fund must maintain a position of at least 75%. Regardless of whether the market is bullish or bearish, this line cannot be broken. Why such strictness? Simply put, the fund manages other people's money. For fund holders, the biggest fear is missing out—once they miss a rally, they feel upset.

During a bear market, this is understandable. The entire crypto market and stock market are falling, and funds are falling along with them. Investors may not be happy, but their mindset is "everyone is the same," and many simply stop watching the market.

But in a bull market, it becomes a big problem. Seeing certain coins skyrocket to ridiculous levels with overinflated valuations, they should logically exit. But why do fund managers still insist on holding on? Because they can't afford to gamble. If they choose to hold an empty position and the market continues to rise, investors' returns are diluted, morale drops, and eventually they start redeeming funds to chase other products. This is the worst-case scenario for fund managers.

To put it plainly, it's driven by interests. Fund managers earn management fees, not rewards based on how much they earn. They care about the size of the fund and fear investors leaving. So, the rigid position requirement becomes a shackle—both a performance assessment criterion and a means of self-protection.