Are American institutions out of money? Is it the reason for the decline? The sudden and continuous decline today is not only in stocks and cryptocurrencies, gold and silver are also falling, and the US dollar is also falling. My first thought is whether institutions are leaving, and what are the reasons for their departure? Then I thought, institutions should not have much cash left. Last week, we looked at the allocation of global fund managers and knew that cash allocation had hit a historic low of 3.2%. This indicates that the cash in the hands of fund managers is no longer sufficient to continue driving the market up. At the same time, we also saw a large amount of data. Currently, the main buyers of ETFs should be retail investors, so retail investors have become the "buyers" of institutions, which is logically valid. Then I saw the chart of US aggregate investable funds as a% of the US equity market cap (the total amount of investable funds in the US, as a percentage of the total market value of the US stock market), indicating that the proportion of available cash for investment in the US relative to the total market value of the US stock market has fallen to a historically low level, indicating that the overall market is in a state of low cash, full positions, and more sensitive to new liquidity. To put it simply, everyone is almost full and there is no cash left to continue bargain hunting. Of course, having less cash does not mean institutional bankruptcy, but rather a decrease in the marginal ability to make incremental purchases. As long as there is not a particularly big bearish trend in the market, it will switch from an upward trend driven by emotions and inflows to a downward trend driven by redemptions. When the position is very full, any fluctuations will trigger risk budgeting, margin requirements, stop loss lines, and then become passive reduction of positions, rather than subjective exit. More importantly, today's decline exhibits this characteristic, and the message brought by the earnings season is that it has become the last straw to crush the camel, not because the earnings report is poor, but because the market has no room for error. The earnings season is essentially two things, one is expectations and the other is volatility. When the expectations have been pushed to the extreme of optimism, the financial report does not need to be very bad. As long as it is not good enough, it will be regarded as negative by the market. When the position is already full, the financial report does not need to explode. As long as the volatility rises, the risk control model will let the institution sell first. So today's decline is more likely due to the passive exit of institutions, and the financial reports and earnings have already given many institutions sufficient profits. The market may increase its amplitude in the future due to the financial reports, especially the rise of gold and silver, which has led to the triggering of risk control. Therefore, the first assets to be sold are often not the worst assets, but the best selling and most liquid assets, including stocks ETF、 Gold, and even some mainstream cryptocurrency assets, will be sold first. It is precisely because of this that I think this wave of decline is more like the marginal decrease in liquidity causing funds to switch from the "add in mode" to the "save life mode". In the "life-saving mode", institutions are not doing "bearish exit", but "first reducing risk exposure", which is the result of "position structure+risk control mechanism". So back to the question at the beginning, 'Are US institutions running out of money? Is it the reason for the decline?' A more accurate statement would not be that institutions are running out of money, but rather that their cash ratios are too low and the market as a whole is full, making the market extremely sensitive to any fluctuations. Once there is a high volatility event such as the earnings season, it will switch from relying on incremental funds to passively selling during the decline. The next thing to look at is also very simple. If ETF fund flow starts to turn negative, redemptions continue to occur, and volatility continues to rise, then this wave of decline is not a one-day or two-day event. On the contrary, if the flow of funds continues to flow in (retail investors continue to buy) and is only short-term deleveraging, then the depth of the investment may actually be an opportunity to buy at the bottom. PS: This is just a hindsight. Last week, I did say that fund managers may make a profit and leave, but I don't know the specific time and method. I can only speculate on the possible reasons by looking at more data. @bitget VIP， Lower rates and more generous benefits