Recently, Matrixport announced the official launch of its exclusive structured product, “Buy Now Pay Later（“BNPL”)”. Users can purchase crypto assets through BNPL without requiring additional margin. With the bull market and increased trading enthusiasm, BNPL has garnered widespread acclaim since its launch.
This article will explain the principles, advantages, and profit mechanisms of BNPL, along with a step-by-step guide to help you seamlessly enjoy “buy now, pay later” and easily maintain market exposure.
What is “BNPL”?
“BNPL” is a crypto financial derivative that combines crypto assets with traditional financial investment tools known as “instalment warrants,”. Users can leverage a small amount of capital to secure potential returns on the underlying asset, enhancing asset utilization.
In simple terms, just like making a down payment on a house, users can pay a small upfront amount to purchase crypto assets like BTC, allowing them to secure potential returns. On the maturity day, users can either pay the remaining balance to acquire the asset or choose to receive cash value instead, offering a clear advantage over traditional home financing.
Comparison Between “BNPL” and Contract
As a low-risk leveraged product, what are the advantages of BNPL? To provide a clear and comprehensive understanding, here’s a simple comparison between BNPL and contract trading:
Yield Mechanism and Usage Scenarios of “BNPL”
Upon maturity, users can choose to “pay the final payment” or “not the final payment”:
1. Pay the Final Payment
- Pay the remaining loan and take physical delivery: On the maturity day, users can choose to pay the remaining loan to obtain the underlying assets.
2. Not Pay the Final Payment
- Cash settlement without paying the final payment: On the maturity day, users can choose not to make the final payment and settle the underlying assets in cash, gaining the corresponding investment return.
- Auto-Renewal without paying the final payment: On the maturity day, users can also choose to extend the contract and use the cash value of the settled underlying asset as the down payment for the next BNPL product.
To help users better understand the yield mechanism of “BNPL”, here is a detailed example:
Suppose User A wants to purchase 1 BTC, with the current market price of BTC at $75,961. A selects an 84-day BNPL product with a down payment of $14,941 and a final payment of $68,000, maturing on January 31, 2025.
If the settlement price of BTC on the maturity day is $100,000, the user’s calculation options and potential returns are as follows:
- The user pays a remaining balance of $68,000 to obtain one BTC. The user’s returns are as follows:
The user’s PnL = 100,000 – 14,941 – 68,000 = $17,059
- The user opts to settle in cash without paying the $68,000 final payment
A can gain the cash value = ( 100,000 – 68,000 ) / 100,000 ]*1 = 0.32 BTC
PnL = 100,000*0.32-14,941 = $27,059
- The user opts to use the cash value to extend the contract without the $68,000 final payment
A can gain the cash value = ( 100,000 – 68,000 ) / 100,000 *1 = 0.32 BTC
Then the 0.32 BTC cash value will extend the contract as the down payment for the next BNPL product.
Cash Value: Max { 0, [ ( Settlement Price – Final Payment ) / Settlement Price ] * Purchase Quantity }
In the example above, if BTC’s price drops significantly by the maturity date, the user’s maximum loss is only the down payment, with no negative cash value.
While Matrixport’s “BNPL” offers innovative investment methods and flexible fund management advantages, cryptocurrency volatility is high and investors should consider it carefully. For example, if the price of the underlying asset (BTC, ETH) falls significantly during the investment period, the investor may not achieve the expected returns, with the maximum loss capped at the down payment.
Matrixport’s “BNPL” combines the advantages of traditional finance innovatively, offering users a flexible, low-threshold investment portfolio that helps capture enhanced returns without additional margin risks. For investors looking to maintain long-term exposure in the crypto market, “BNPL” is an efficient and flexible investment tool.
How to Subscribe to “BNPL”
Here is a step-by-step guide to subscribing to “BNPL” on the Matrixport App:
- Step 1: There are several ways to access the “BNPL” page:
Method 1: Go to the Home page navigation bar, scroll to “Wealth management”, and click on “BNPL” to directly access the product page.
Method 2: Go to the Investment page and directly click “BNPL” to access the product page.
- Step 2: Subscribe to “BNPL” product（ Taking the “BTC BNPL” product as an example )
1. Select the underlying asset, product period, and leverage ratio, then confirm the reference down payment and final payment amounts, and click the desired product.
2. Go to the subscription page and enter the quantity of the underlying asset, choose the payment currency, and confirm the required down payment amount.
Note: The index of the underlying asset will be displayed on the upper right corner of the subscription page for reference.
3. Next, scroll down to “Procedure”, choose the settlement options ( one of the three options ) and confirm the maturity time;
Note: the settlement price is the average price within 30 minutes before the maturity; The “Payoff Analysis” and the price trend are only for reference, Investment decisions should be made after carefully considering individual circumstances and consulting financial professionals.
4. Finally, double check the product details and payment amount, make sure you read , understand, and agree to the Risk Disclosure and Agreement, and click the “Buy Now” button.
Disclaimer: The above content is for informational purposes and reference only. The content does not constitute investment advice. Digital asset transactions can be precarious and volatile. Investment decisions should be made after carefully considering individual circumstances and consulting financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.
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