On February 10, 2026, Cobo Co-founder and CEO DiscusFish posted a thought-provoking viewpoint on X: the greatest structural advantage of individual investors in the crypto market is not the often-overhyped information asymmetry or capital volume, but a simple phrase: "no one needs to explain." On the same day, the BTC spot trading volume was recorded at $7.712 billion. In such a high-volume market environment, funds, under the multiple pressures of LP requirements, drawdown lines, and quarterly assessments, staged a typical "forced selling" scenario. Thus, a suspense that runs through the entire cycle was once again brought to the forefront: in every round of panic selling, who is creating the selling pressure, and who is quietly picking up the bottom chips that are passively sold off?

No One Needs to Explain: The Overlooked Real Advantage of Retail Investors

● DiscusFish's core statement is very direct—"the greatest structural advantage of individual investors is not information, not capital volume, but 'no one needs to explain.'" This statement has been highlighted in various industry media, becoming the anchor point of the entire viewpoint. Compared to those managers who need to explain drawdowns or institutional traders who must report to the board, retail investors do not have to write memos in front of every floating loss, nor do they need to hold conference calls after every drawdown. This position of "no accountability" is itself a scarce resource.

● In practical trading terms, "no one needs to explain" means that retail investors do not need to prepare quarterly reports for a single candlestick, will not be repeatedly questioned by LPs when net value declines, and will not be required by compliance and risk control departments to submit "stop-loss explanations." When the market experiences severe fluctuations, institutions face red lines for drawdowns and assessment nodes, while retail investors only confront their own emotional fluctuations. This structural difference creates completely different constraints for the two types of participants regarding the same price fluctuations.

● Traditionally, retail investors are seen as being in a passive position: delayed information acquisition, weak research capabilities, and limited capital volume make it difficult to compete on the same starting line as professional institutions. However, DiscusFish's assertion shifts the perspective from "resource gap" to "institutional constraints," leading to an counterintuitive conclusion—under the premise of not needing to explain profits and losses to any third party, retail investors actually possess a structural advantage that institutions find hard to replicate: at critical moments, they can choose a longer holding period rather than passively comply with short-term assessments.

How Drawdown Lines and LP Calls Force Out Minimum Sell Orders

● For most funds, behind the capital stands the LP's return expectations and risk tolerance. Product contracts often set up strict drawdown control mechanisms, accompanied by quarterly or even monthly assessment indicators. Once the net value falls below a certain threshold, managers must provide detailed explanations to LPs and may even face redemption or scale-down realities. These seemingly "professional" institutional designs, during periods of severe market fluctuations, compound into rigid constraints on managers, turning the question of "to sell or not to sell" into one with little freedom.

● One can imagine a scenario summarized by multiple media outlets: the market plummets sharply in a short time, and the fund's net value approaches the pre-set drawdown red line; LPs begin to frequently call after seeing the net value report, inquiring about risk control and reduction arrangements; the internal risk control system automatically issues warnings after hitting the line, demanding a rapid reduction in positions. Even if managers subjectively judge that the current position is likely close to a local bottom, they must execute sell orders under pressure, leading to concentrated selling in the most vulnerable price range.

● "Funds are forced to sell at the worst possible time" has gradually become a consensus among market participants. Whenever this passive reduction occurs densely at the bottom, the downward price is often further amplified, creating a stampede marked by institutional branding. The design of drawdown lines, LP scrutiny, and assessment cycles is intended to "prevent greater losses," but in the high-volatility crypto market environment, it creates one round after another of forced liquidation at low prices, compressing the elasticity of short-term prices to the extreme.

Who is Picking Up the Pieces from Passive Selling?

● From the microstructure of the order book, when forced selling is triggered, there is often a sudden influx of market orders or near-market limit orders, which quickly consumes the buying depth. If there are limited limit buy orders hanging below at this time, the order book can easily be smashed out of "gaps," causing prices to break through multiple levels and trigger a chain reaction. Liquidity is instantly drained, and what could have been a gradual adjustment turns into a waterfall-like price collapse within minutes.

● During these moments dominated by passive selling, it is often not the institutions under high-pressure risk control that can truly maintain the rhythm, but those individual investors who have preemptively placed limit orders in batches below. Institutions must execute sell orders within a predetermined time window, while retail investors can break down their positions into multiple limit orders over a more relaxed time dimension, patiently waiting for prices to crash into their buy order ranges. This way, the time difference and pricing initiative gradually shift towards those who are not subject to assessment constraints.

● Looking back to February 10, 2026, the $7.712 billion BTC spot trading volume indicates that the market was in a typical high turnover state that day. In such a high-volume environment, forced liquidation, manual stop-losses, and panic selling are likely to overlap, further amplifying the microstructural "passive selling—active absorption" game. The structural advantage of retail investors emphasized by DiscusFish is actually lurking in these high-volume moments—some are passively smashing the floor, while others are quietly picking up chips from the air with patient limit orders.

How Retail Investors Use Volatility and Time to Accumulate Bottom Chips

● Without the constraints of LPs and drawdown lines, the greatest flexibility for retail investors lies in their ability to actively extend their holding periods. The crypto market does not have the traditional quarterly assessment system, allowing individual investors to place their judgment logic over longer cycles. As long as there is no extreme individual capital pressure, there is no need to "explain" for the fluctuations of a single candlestick. This freedom enables retail investors to endure longer periods of sideways movement and floating losses at the cycle bottom.

● Given the long-term high volatility characteristics of crypto assets, retail investors can consciously use severe fluctuations to gradually accumulate bottom chips. For example, during consecutive large drawdown phases, they can absorb passively sold chips in extremely pessimistic ranges through batch buying and layered limit orders; during price rebounds, they have ample time to decide whether to realize some profits or continue holding. High volatility is not merely a risk; for those not forced to settle, it is also a path to slowly build a cost advantage in position.

● In contrast, the T+ trading rules and stricter regulatory constraints in traditional financial markets often place retail investors in a more passive position regarding rhythm and tools. However, in the crypto market, around-the-clock trading, global liquidity, and fewer formal constraints allow individual investors to adjust their positions within a more relaxed boundary. This difference, combined with DiscusFish's emphasis on "no one needs to explain," gives retail investors in the crypto market a more prominent structural advantage in specific situations compared to traditional markets.

When Emotion Meets Assessment: Two Fates Under the Same Candlestick

● Narrowing the perspective to a single candlestick of a sudden drop: for institutional traders, this often means a series of automatically triggered stop-losses, risk control plans, and upward reporting pressures. If this candlestick drives the net value close to the drawdown red line, they have little choice but to execute liquidation orders under risk control requirements. For retail investors, the same candlestick brings more of a psychological test—whether to choose to be swept away by emotions and cut losses, or to continue holding firm or even add to their positions, confirming that their logic has not been overturned.

● Media plays a role as an amplifier of emotions during such times. When phrases like "institutions are heavily cutting losses" and "market panic spreads" are rapidly disseminated, the order book, originally limited to trading terminals, experiences violent fluctuations, packaged into a narrative of panic across the entire market. When retail investors encounter such information, they are often forced to make emotional decisions in a shorter time frame, while institutional passive reductions are further portrayed as confirmation signals of "smart money fleeing," exacerbating the short-term stampede effect.

● The intertwining of emotional narratives and institutional constraints often results in sharper formations at the bottoms of the crypto market: sell-offs come quickly and violently, and the speed of panic spreading far exceeds that of traditional markets; but also because some chips are incorrectly cleared at the bottom, once there is no continued passive selling pressure, rebounds can be exceptionally rapid. The structural advantage that DiscusFish discusses manifests in this "extreme plunge—violent rebound" main theme—some are pushed out at the lowest point by the system, while others quietly gather these chips at the same moment.

Structural Advantages Exist, but Retail Investors Still Need to Be Responsible for Themselves

● Summarizing DiscusFish's viewpoint, the true advantages of retail investors lie in two points: freedom of decision and long-term perspective. The former means that there is no need to write explanation letters for any third party, allowing them to layout completely according to their own understanding and rhythm; the latter means they can judge risks and returns based on longer-term cycles rather than being swayed by quarterly returns. This combination is a natural advantage that current institutions, under compliance frameworks and capital source structures, can hardly replicate, and it is also the deeper meaning behind the phrase "no one needs to explain."

● However, structural advantages do not equate to guaranteed profits. No one needs to explain to you, which means that all the consequences of decisions must be borne by oneself: high-leverage liquidations will not have risk control departments helping you hit the brakes in advance, and emotional heavy positions will not have anyone writing risk control reports for you. If retail investors mistakenly interpret "freedom" as "arbitrariness" and abandon basic risk control and position management, then the so-called advantages will quickly turn into leverage that amplifies losses, becoming the true factor pushing them toward liquidation.

● Looking ahead, against the backdrop of ETF product expansion, gradual improvement of regulatory systems, and a new round of institutional capital continuously entering the market, market rules will inevitably continue to align with traditional finance. Institutions may alleviate short-term assessment pressures through more flexible product designs and longer capital lock-ins, while retail investors will need to reposition their roles in the face of increasingly refined products and tools. At that time, the structural advantages of retail investors emphasized by DiscusFish may not be completely dissolved, but their boundaries and forms are likely to be redefined—those who can truly benefit continuously will still be those who clearly understand the rules and are willing to take responsibility for their decisions.

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