Care to buy Bitcoin at discount? An insight into Matrixport’s new product — Dip Hunter
There is a saying on Wall Street –“Don’t try to catch a falling knife.” This also applies to the cryptocurrency investment. Many veteran investors prefer the Automatic Investment Plan (AIP) to ensure balanced cost in a highly volatile market. It is usually difficult for ordinary investors to make a well-informed decision on when to invest. Matrixport’s Dip Hunter is a perfect solution to this dilemma.
Suppose AIP is your go-to strategy in building your portfolio. You invest 500 dollars each month, but retail investors most of the times feel unlucky, and you are no exception. You buy BTC at 9700 USD, but within an hour the price drops 100 USD against you — it’s just so common. Each tranche of investment is a painful experience — it’s as though market is excited to see you lose. But by making BTC investments with Matrixport’s Dip Hunter, you will be able to buy coin at lower cost. How is this possible?
To put it briefly, Dip Hunter is a wealth management product that helps you buy BTC at a discount. Suppose you buy the Dip Hunter today — the discounted BTC price on expiry is determined by the numeric comparison between the Settlement Price and the Linked Price.
Dip Hunter carries an investment logic similar to Matrixport’s dual-currency investment products. The dual-currency investments determine the settlement currency based on the ‘linked price’. When the settlement price is higher than the linked price, you will get settlement in USDC； Otherwise, you will be settled in BTC. Either case, you will be assured a very high annualized return on your settlement currency. Dip Hunter is similar: You are assured a discount to buy Bitcoin — the only uncertainty is — the price is a discount to the settlement price on expiry or the strike price.
Example
The following are the product parameters:
Linked price: 9,600 USD
As a benchmark price, the linked price is used to be compared with the settlement price at expiry.
Expiry Date: February 27, 2020
Discount rate: 5%
The Discount rate means the discount of the final BTC purchase price. It is used in the calculation of the actual purchase price and ultimately affects the quantity of BTC to be received at the expiry date.
Investment currency: USDC/USDT
Let’s say you purchased 10,000 USDC of the product with strike price 9600 on February 11, 2020. Two possible outcomes that could result on February 27, 2020.
Result 1:
If the BTC/USD settlement price is higher than 9600, You will buy BTC at 5% discount to the settlement price. For instance, suppose the settlement price is 9700. Therefore, your BTC purchase price is 9,700*(1–5%), or 9215 USD. You will receive 10,000/9,215 BTC, or, 1.0851 BTC.
Result 2:
If the BTC/USD settlement price is lower than or equal to 9600, you will buy BTC at 5% discount to the strike price. Your BTC purchase price is 9,600*(1–5%), or 9120 USD. You will receive 10,000/9,120 BTC or 1.0964 BTC.
In other words, you can make a BTC purchase at a price that is lower than the linked price or market price when a product matures. Take the AIP on February 27, for example. In the past, you can only make BTC purchase at the current market price, but with the Dip Hunter, you will have the opportunity to purchase at 5% below the market price.
The Dip Hunter, can help investors purchase BTC at a preferential price without having to constantly study market trends, allowing them to avoid impulsive investments. It offers investors a chance to buy BTC at discount to the settlement price or the linked price.
Disclaimer:
1. Before making any investment decision, you should take your own independent review on whether the product is suitable for you in light of your own financial situation, investment experience, investment objectives, investment horizon, willingness and ability to bear risks, and whether you understand the nature and risks of the product. If in doubt, you should seek advice from independent financial advisers.
2. The Dip Hunter is not equivalent to a deposit and it is not principal protected.
3. This statement is for reference only. It is not and does not by itself constitute any offer, solicitation or recommendation to buy, sell or provide any investment product or service.
About matrixport
Founded in February 2019, Matrixport is your gateway to the digital economy where you can trade, custody, invest and borrow crypto assets all in one stop.
With rich industry resources and leading technology capabilities, Matrixport aims to create the next generation digital financial service platform. Our vision is to enable a more open and equal financial system using blockchain technologies.
Matrixport has launched trading, digital asset custody, and cryptocurrency lending service for clients around the world, with even more innovative product offerings to come.
Matrixport is headquartered in Singapore with offices worldwide.
