1. Summary
What is a Decumulator?
Decumulator is a structured financial product that helps investors (such as miners, large investors, and project owners) who hold a large amount of Bitcoin and other crypto assets to gradually sell their coins at a price higher than the market price. It achieves premium reduction by pre-agreeding on a price higher than the current market price and selling a fixed number of coins periodically within a certain period of time in the future.
What problems can it solve?
For large holders who may easily crash the market with a one-time sale, Decumulator provides a mechanism for selling in batches to avoid impacting the market price. At the same time, the selling price is locked at a level slightly higher than the current market price, which is equivalent to obtaining additional premium income. Miners and other coin holders who need to cash out continuously can use this solution to increase the average selling price of coins and lock in part of the income.
Who is it suitable for?
It is mainly suitable for investors who hold a large number of coins and hope to gradually reduce their holdings in the future. For example, miners sell coins regularly to pay costs, and large investors or institutions want to cash out part of their positions at a high price but do not want to miss out on potential subsequent increases.
Benefits and Risks
Participating in Decumulator gives you the opportunity to sell at a fixed price higher than the market price to earn premium income, but you also need to bear corresponding risks: if the market surges in the future, you may miss the opportunity to sell at a higher price; if the price plummets and triggers early termination, you can return the coins that were not sold at a premium to avoid being sold at a low price; in addition, there is the risk that the sales volume may double. In short, the essence of Decumulator is to exchange the possible future increase for the current premium reduction.
2. Definition and Development of Decumulator
Decumulator (often called accumulated put option or reduction and accumulation product in Chinese) is a structured financial product that allows investors to sell a certain amount of underlying assets (such as Bitcoin) at a pre-agreed fixed price at a fixed period within an agreed period. Unlike traditional transactions where the market price is directly sold, the execution price set by the Decumulator contract is usually 5% to 30% higher than the market price at the time of signing, that is, higher than the current market price.
In this way, if the market price remains below this level, investors can gradually sell the coins at this higher price, achieving the effect of selling above the market price.
Decumulator originated from structured derivatives in the traditional financial market, and its counterpart in the stock market is the cumulative put option contract. In the past, some investors suffered losses due to the misuse of cumulative options, which gave this type of product a bad reputation in the traditional market. However, in the context of high volatility unique to the crypto industry, Decumulator was reintroduced and gradually developed, becoming an important tool for customized reduction needs of miners, large households, etc. Matrixport and other institutions took the lead in launching the encrypted version of the Decumulator product in the industry, optimizing the traditional design, such as introducing a mechanism for daily observation and weekly delivery, supporting flexible adjustment of parameters, and providing a user-friendly interface and professional guidance process, making this product closer to the needs of crypto investors. Today, Decumulator has become one of the preferred strategies for many large coin holders to gradually cash out at the high point of the bull market.
Current market background: As of today (June 15, 2025), the market price of Bitcoin is about $105,000. In actual Decumulator products, the strike price is usually set at a premium of 5% to 30% over the current price, which is currently in the range of about $110,000 to $137,000. This means that investors have the opportunity to sell Bitcoin at a price 5% to 30% higher than the market price in the future. Of course, the choice of premium reflects the investors judgment on the future market: the higher the premium is set (for example, 30%), if the market price does not rise to that level, you can still sell the currency at a high price; but on the other hand, once the market rises sharply above the strike price, you may need to sell more coins and cannot enjoy a higher market price (explained in detail below). On the contrary, setting a lower premium (for example, 5%) makes it easier to sell as planned, but the additional profit space is also smaller.
3. Decumulator Mechanism and Core Parameters
To deeply understand Decumulator, we need to understand its core parameters and operating mechanism. Each Decumulator product generally includes the following key elements:
Strike Price
The selling price agreed upon by the investor and the platform. All coins planned to be sold will be traded at this price, regardless of the market price on that day. For example, if the execution price is set at $115,000, even if the market price is only $100,000 on a certain day, the coins sold by investors will be calculated at $115,000, and a premium will be obtained; on the contrary, if the market price on that day is higher than $115,000, the selling price will still be $115,000 (equivalent to less profit). The execution price is usually set at 105% to 130% of the market price at the time of signing the contract, which represents how much premium the investor hopes to get. The higher this price, the more premium you get, but the greater the probability and risk of subsequent deviations.
Knock-Out Price
Also known as the cancellation price, it is the price at which the contract is terminated early. For Decumulator, the knock-out price is generally lower than the initial market price (for example, if the initial BTC price is $105k, the knock-out price may be set at around $90k to $95k, a drop of 15% to 10%). When the underlying market price falls below the knock-out price, the contract will be knocked out and terminated early, and the subsequent unsold shares will be cancelled. The purpose of designing the knock-out price is to prevent investors from selling coins at a price far higher than the market price when the price plummets, causing huge losses to the platform - in other words, if the market turns bearish and plummets, the contract is terminated early, and investors can only sell the part that has been traded before the knock-out, and the remaining coins will be returned and kept in their hands.
Observation frequency
Refers to the frequency of monitoring the knock-out conditions and multiple conditions. Most Decumulators use daily observation, that is, at the close of each day (UTC+8 time 15:30 to 16:00 time weighted average price), check whether the observation price touches the knock-out price or the execution price, thereby determining the contract status or the number of coins sold. Matrixports innovation lies in daily observation and weekly settlement, that is, monitoring the trigger conditions every day, but the actual delivery is aggregated once a week, making operations and capital flows more efficient. The more frequent the observation frequency, the more timely the risk monitoring.
Execution frequency
Refers to the frequency of actual sales and delivery. Weekly settlement is adopted, that is, the amount of sales is determined every day within a week, and the number of coins sold in a week is summarized and delivered uniformly every Friday. This design ensures flexible response to the market every day while reducing frequent trading operations and costs. The execution frequency mainly affects the flow of funds and the convenience of operation. Generally speaking, the shorter the cycle, the sooner investors can recover their funds.
Contract duration
That is, the total duration of the Decumulator contract. It can be set by day, week, or month, such as 4 weeks, 8 weeks, or up to 48 weeks. For example, a 30-day period is 30 consecutive days including weekends. The longer the period, the greater the total potential cumulative sales, the greater the market variables, and therefore the higher the risk (because extreme market conditions may occur over a longer period of time). Some investors will choose the length of the period based on their own judgment of the future market trend: if they believe that prices will be stable or volatile in the short term, they can choose a shorter period to reduce their holdings in a concentrated manner; if they want to ship in batches over a longer period of time, they can choose a longer period.
Daily sales volume
The number of base coins that investors plan to sell at the strike price every day. For example, the contract stipulates that 1 BTC is sold every day. If the contract expires normally and is not struck out, the daily sales volume × actual execution days × execution leverage multiple is the total number of coins after taking leverage into account. When signing a contract, investors usually lock in a corresponding number of coins for performance. It should be noted that the multiple clause may lead to an increase in the actual daily sales volume, so the basic daily sales volume should be set according to ones own positions and risk preferences to ensure that there are enough coins available for delivery in the most extreme cases. The daily sales volume can be flexibly customized, ranging from 0.1 BTC to dozens of BTC. The key is that investors clearly know the total amount and rhythm they want to reduce their holdings. The advantage of dispersing daily sales is to avoid the impact of a one-time sell-off on the market, which is suitable for large holders to slowly ship.
Gearing Ratio
This is the most characteristic and riskiest clause in the Decumulator. When the market price reaches certain conditions, investors need to sell double the number of coins on the same day. Specifically, if the closing price of the day is higher than the strike price, it is considered that the market is unfavorable to the seller (the coin price has risen above expectations), and the number of coins sold on the same day will increase by the agreed multiple. The most common is 2 times, which is commonly known as the double clause: when the coin price closes above the strike price, you need to sell twice the original plan on the same day. For example, if you originally sold 1 coin a day, you actually need to sell 2 coins on the same day when the closing price of Bitcoin is higher than the strike price. The multiple clause converts the potential profit brought by the rising market into an additional selling obligation: the higher the price, the more you sell. This design is a mechanism used by the issuer to hedge risks, which is equivalent to investors selling call options and giving up part of the future rising gains in exchange for the extra premium earned when each coin is sold. It should be noted that some contracts have a multiple of more than 2x, and may even have 3x or 4x, but 2x is the most common; the higher the multiple, the more investors need to sell when the market is booming, and the more potential missed profits, so the risk amplification effect is obvious. When the multiple clause is triggered, investors must have enough coins to fulfill the contract or prepare additional assets in advance, otherwise they may face the risk of default or forced liquidation.
The above parameters together determine the details of the operation of the Decumulator. During the contract period, at each observation point (usually daily), the system will perform corresponding actions based on the position of the current market price relative to the strike price and the knock-out price:
If the price is higher than the strike price (not struck out): the multiple clause is triggered, and the quantity sold on the same day is doubled (2 times or the multiple agreed in the contract). For example, the strike price is $115k, and the closing price is $120k, which exceeds the strike price by ~4.3%. Then, 2 BTC (basic 1 BTC × 2) must be sold on the same day, and both are traded at $115k. Note that even if the market closes at $120k, the 2 BTC you sold are still traded at $115k, which is equivalent to $5k less potential profit per coin; and you sold twice the number of coins you originally planned, reducing the subsequent position.
If the price falls below the knock-out price: the knock-out is triggered and ends early. For example, if the knock-out price is set at $90k, if the closing price falls to $88k on a certain day, the contract ends on that day, and the previously sold part remains valid, but the subsequent unsold part is cancelled. Investors will no longer sell coins from the next day, and the remaining coins will still belong to them. Being knocked out means that the market has fallen sharply, and your original plan to sell coins at $115k is forced to be terminated. The market price of the unsold coins is only around $88k at this time, and you have missed the opportunity to sell at a high price.
Through the above mechanism, Decumulator realizes the function of steadily reducing holdings within the agreed range. The result is: if the market is stable or rises or falls slightly, you can continue to sell at a price higher than the market price and obtain premium income; if the market rises sharply, you will sell more coins but the price is locked at a lower strike price, giving up the part of the increase that exceeds the strike price; if the market falls sharply, you stop early, the subsequent reduction plan fails, and the unsold coins have to bear the loss of the market price decline. For this reason, Decumulator is suitable for investors who have a judgment on the price range and want to lock in the current high price. It makes a balanced exchange between benefits and risks through complex terms design.
4. Case: Decumulator operation where miners gradually sell BTC
To understand more intuitively how Decumulator works, lets look at a simple case. Suppose a Bitcoin miner named Zhang holds 60 BTC, and the current market price is about $105,000. He expects Bitcoin to consolidate at a high level in the next month, with limited gains, so he hopes to gradually sell some of the coins in the next 30 days to lock in the proceeds to pay for operating costs. At the same time, Zhang is worried that the price will continue to soar and miss out on more profits, and he doesnt want to sell all at once. So he considered using the Decumulator product to reduce his holdings in batches. Zhang customized a 30-day BTC Decumulator contract on Matrixport. The key elements are as follows:
Execution price: $115,500 (110% of the current price, a premium of about 5%). In other words, no matter what the BTC price is every day, Xiao Zhang will sell the coin at $115.5k per coin. Compared with the current price, this is equivalent to an additional $5,500 premium profit per coin.
Knockout price: $90,000 (about 85% of the initial price). If BTC closes at $90k or lower on any day, the contract will terminate and Xiao Zhang will no longer sell the coin.
Observation/execution frequency: Daily observation, daily selling and delivery (Matrixport also provides daily observation/weekly delivery options, but daily delivery assumption is adopted here for convenience).
Daily basic sales quantity: 1 BTC. That is to say, if the multiple is not triggered, Xiao Zhang sells 1 Bitcoin every day.
Multiple clause: 2x (double sell). If the closing price on the day is higher than the strike price of $115.5k, the number of sales on the day will double to 2 BTC.
After Xiao Zhang signs the contract, he will hold the corresponding coins on the platform for fulfillment (generally, he needs to lock in at least the maximum number of coins that can be sold. The maximum situation here is that the price is always higher than the execution price and has not been knocked out. He will sell 2 times × 30 days = 60 coins, which is exactly all the 60 BTC he holds). Next, lets take a look at Xiao Zhangs coin sales according to different market conditions:
Scenario 1: The price is stable or fluctuates slightly (no multiple or knock-out is triggered)
Assume that the BTC price fluctuates between $95k and $110k in the next month, never exceeding the strike price of $115.5k, and never falling below the strike price of $90k. Xiao Zhang sells 1 BTC every day as planned, and the transaction price is $115.5k. Regardless of whether the market price on that day is $100k or $110k, he gets $115.5k. After 30 days, the contract ends normally, and Xiao Zhang has sold 30 BTC in total, earning about 30 × $115,500 = $3,465 million in funds. Compared with selling directly at the market price, each of these 30 coins earns thousands to tens of thousands of dollars more (depending on the daily market price). He still holds the remaining 30 BTC and enjoys its subsequent rise and fall.
Scenario 2: Price rise triggers multiple (still not knocked out)
Assuming that BTC remains stable in the first half of the month, Xiao Zhang sells the first 15 BTC, each at $115.5k. On the 16th day, the market suddenly starts to rise, and the closing price of BTC rises to $120k, exceeding the strike price for the first time. According to the contract, Xiao Zhang needs to sell 2 BTC (instead of 1) on the 16th day, and the transaction price is still $115.5k. In other words, he could have sold the coin at the market price of $120k on that day, but the contract locked the price so that each coin sold for $4,500 less; more importantly, he sold 1 more BTC (a total of 2), which is equivalent to handing over a part of the chips at a relatively low price. In the next few days, BTC continued to run at a high level, above $115.5k every day, and Xiao Zhang was forced to sell 2 BTC every day. Until the end of the contract (30 days to expiration), assuming that 10 of the last 15 days triggered the multiple clause (selling 2 coins), and 5 days did not trigger it (selling 1 coin), then Xiao Zhang sold 10 × 2 + 5 × 1 = 25 coins in the second half of the month, plus 15 coins in the first half of the month, a total of 40 BTC, 10 more than the original plan of 30. Fortunately, although BTC once rose to $ 130k, because the knock-out price was targeted at the decline, Xiao Zhangs contract was not terminated. According to the contract, he successfully sold 40 coins, each of which was $ 115.5k. To summarize this scenario: Xiao Zhangs chances of getting a premium sale during the price increase are reduced - because when the market price is > $ 115.5k, the coins sold on those days are actually traded below the market price, which is equivalent to missing out on a part of the higher price that could have been obtained. In addition, he sold a total of 40 coins, about one-third more than the original plan of 30 coins, which means that he has fewer coins left (only 20 coins). If Xiao Zhang originally wanted to sell 30 coins at most and keep 30 coins, then he may regret it because he passively sold 10 more coins due to the rising market. However, the $115.5k price he locked in is much higher than the market price of about $105k when signing the contract, which is a good cash-out income for these 40 coins.
Scenario 3: Price crash triggers a knock-out
Assume another extreme. Soon after Xiao Zhang started to sell off his holdings, the price of Bitcoin fell instead of rising. On the 10th day, BTC plummeted by 20%, from $100k the day before to $80k, which was lower than the knock-out price of $90k. The close of the day triggered the knock-out clause, and the contract was terminated immediately. The BTC that Xiao Zhang sold in the previous 9 days (1 per day, a total of 9) was traded at $115.5k, and he had secured his money. But from the 10th day on, he could no longer sell the coins at a high price, and the remaining coins (the 51 coins that were originally planned to be unsold) still belonged to him. The problem is that the market is now only $80k, and the market value of the coins in his hands has shrunk significantly compared to before. If he still wants to sell, he can only accept a market price of around $80k, which is much lower than the $115.5k that was locked in at the beginning. The result of the knock-out is that Xiao Zhang missed the opportunity to sell off his holdings at a high price in the future: when the market turned bearish, most of the unsold coins were not liquidated in time. This also highlights one of the risks of the Decumulator - the high price promised at the beginning is not 100% fulfilled, but depends on whether the market trend is within the agreed range.
The above cases cover the possible performance of Decumulator under three typical trends. In reality, the market is often complex and changeable. Investors need to fully consider various possibilities before signing a contract and design parameters to meet their expectations. For example, if Xiao Zhang firmly believes that BTC will not plummet, he dares to set a lower knock-out price; if he is afraid of missing the skyrocketing market, he may reduce the premium of the execution price or simply not use the multiple clause to reduce the risk of selling too much. In short, Decumulator provides a return lock strategy, which uses preset conditions in exchange for a certain return, and the specific effect varies from market to market.
5. Why can I sell coins at a price higher than the market price? —— The logic behind it
Many readers may wonder: The market price is about $105,000, why would anyone be willing to buy my coin for $115,500? After all, selling at 5%-10% above the market price sounds a bit like fleecing. In fact, this is not a free lunch, but the structural design of the Decumulator, and its essence can be explained by the principles of hedging and options.
Simply put, Decumulator implies an option combination transaction. When you use Decumulator to lock in a high price to sell coins, it is equivalent to selling a call option to the counterparty. The counterparty (usually the product issuer or its liquidity provider) is willing to give you this premium because you have made a corresponding concession - you agree that if the price rises beyond the strike price in the future, you will give up that part of the increase and sell more coins to the other party (this is the role of the multiple clause). This behavior is like selling the possible future price increase benefits to the other party in advance, and the other party pays you to let you sell the coins at a price higher than the market price now. For example, if you are willing to lock in a selling price of $115.5k, it is actually equivalent to giving away the right to BTC to rise above $115.5k. Therefore, if BTC subsequently rushes to $130k, the other party actually buys your coins at a low price (because you still sell it to him at $115.5k), which is equivalent to earning the difference. If BTC does not rise sharply or even falls, the other party will not trigger the multiple clause and will need to continue to buy coins from you at a price higher than the market price of $115.5k. Then the premium you earn during this period is actually the option fee paid by the counterparty.
From another perspective, Decumulator can be seen as a variant of hedging transactions: investors use the coins they actually hold as collateral and promise to sell at an agreed price in the future (this is similar to selling call options or making forward contract delivery) in exchange for the benefit of the current higher selling price. This is similar to the principle of hedging strategies commonly used by some miners - giving up part of the possible future surge in profits to ensure the current lock-in of stable cash flow. Especially when miners or project parties need funds, instead of betting that the future will definitely rise, it is better to lock in the price range for a period of time in the future, so that the coins in hand can both participate in the rise and ensure gradual realization. The accumulator/decumulator in the name of Decumulator means accumulation/reduction, and its original intention is to help investors achieve gradual trading and smooth returns in volatile market conditions.
It is worth mentioning that Decumulator and its twin product Accumulator (accumulated purchases) are logically mirror images:
Accumulator allows investors to gradually buy assets at a price slightly lower than the market price (equivalent to selling a put option to get a discount), while Decumulator gradually sells at a price slightly higher than the market price (equivalent to selling a call option to get a premium). The source of income for both is option fees, but in opposite directions. Therefore, understanding this will help readers understand that there is no free lunch in the world. While Decumulator allows you to sell coins at a high price, it also binds corresponding obligations and risks. Investors get a certain premium income, but the price they pay is that if the market fluctuates violently, they will either earn less or bear losses. This is an exchange of income and risk, and there is nothing mysterious about it.
6. Who is suitable to use Decumulator?
As a professional structured reduction tool, Decumulator is not suitable for everyone. According to our analysis, the following types of investors are more suitable to consider Decumulator:
Miners/ Mining Institutions
Miners often hold a large amount of BTC or other cryptocurrencies, which they need to cash out regularly to pay for electricity bills, operating costs, etc. They usually hope to gradually cash out during a bull market or when prices are relatively high, but they dont want to sell all at once or miss out on subsequent market conditions. Decumulator is very suitable for the needs of miners - it can lock in the selling price for a period of time, ensuring that miners have a stable cash flow, and if the market continues to rise, miners can still enjoy the benefits of the part they have not sold (and the part they have sold has already received a good price even if they earn less). It can be said that Decumulator provides miners with a hedge against future price uncertainties and helps them balance the relationship between taking coins and cashing out.
Early investors/project parties
Many early holders, teams or funds of blockchain projects need to exit some of their positions after the tokens are unlocked. If a large number of tokens are sold directly in the secondary market, not only will the price drop rapidly, but it will also easily cause market panic. With Decumulator, these big holders can sell in batches at a predetermined price in a planned manner, avoiding the impact on the market while locking in profits. For example, if a project plans to reduce some of its holdings in the next three months, it can design a Decumulator to sell slowly during this period. This is also more beneficial to maintaining the stability of the coin price and the image of the project.
High net worth clients/institutions holding large amounts of crypto assets
Some cryptocurrency whales or institutions hold large positions. They may want to reduce their position risks at high levels for asset allocation or risk control purposes. Decumulator provides a semi-automated exit mechanism: after setting the parameters, the system will sell a certain amount for you every day, without having to watch the market every day to choose the timing. Especially for institutions, this product can be used as a strategic means of reducing positions and combined with their asset management strategies. In addition, institutions usually have a deeper understanding of derivatives and can better use Decumulator to achieve specific investment goals, such as cooperating with other option hedging strategies.
Investors who expect price range fluctuations
The most suitable market judgment for Decumulator is that the price will roughly remain in a range for a period of time in the future, with limited fluctuations. If you have a neutral view on the market in the next 30 or 90 days and believe that there will not be extreme surges or plunges, then Decumulator can help you gradually sell at the top of this range. Such investors usually have a moderate risk appetite and are willing to sacrifice some gains in extreme market conditions in exchange for a better average selling price in the range. On the contrary, if you are extremely bullish that the market will double several times, or extremely bearish that the market will collapse, then Decumulator is not suitable, because it will either miss out on gains or terminate prematurely in a one-sided market.
In short, Decumulator is suitable for those who plan to reduce their holdings and can accept the preset upper/lower limits of returns. If you dont plan to sell your coins and just want to take advantage of a sharp rise in the price of the coin, then this product is meaningless to you; but if you have a clear cash-out demand or risk control goal, Decumulator can be a powerful tool for you to execute your plan.
7. How to choose a Decumulator that suits you?
Decumulator products on the market usually support a variety of parameter configurations. It is critical to choose the right solution according to your needs. Here we give suggestions from several main dimensions:
Strike price high or low
The strike price determines your target selling price and premium. The advantage of setting a high strike price (large premium) is that if the market is not strong, you can still sell at a high price and make a lot of money; the disadvantage is that once the market approaches or exceeds this price, you will enter the area of multiple selling and may miss more rising dividends. The strike price is set low (small premium), which is more stable, the probability of triggering multiples is reduced, and it is easier to sell all as planned, but the premium income per coin is not high. When choosing, you can consider: How optimistic are you about the future market? If you think that the future will not rise, you can try a high strike price to lock in more premium; if you think there is still room for growth and don’t want to miss too much, you can set a milder strike price and control the premium within 10% to reduce the probability of triggering double in the future.
Length of contract
Short-term contracts (such as 1 week or 1 month) are suitable for those who have a good grasp of short-term market conditions and want to quickly reduce their holdings. The advantage is that the time is short and controllable, and the risk window exposed to extreme market fluctuations is small. However, the number of short-term contracts sold every day is relatively large (because the target reduction volume must be completed in a shorter time), which has a greater impact on the market and a greater psychological pressure on oneself. Long-term contracts (such as 3 months or 6 months) have a slower pace of reduction, a smaller daily sales volume, a smaller impact on the market, and a calm operation. However, the longer the term, the more uncertain factors there are, and the higher the probability of encountering drastic changes in the market (big rises or falls) in the middle, and the possibility of knock-out or multiple triggers also increases accordingly. Therefore, if you tend to cash out quickly, choose a short term; if you want to sell slowly and are not sensitive to long-term fluctuations, you can choose a long term. You can also set up multiple Decumulators of different terms for large positions in batches to disperse timing risks.
Multiple clause setting
Some products allow you to choose whether to enable the multiple clause, or even choose the multiple of the multiple (2x or 3x). If you are very worried that the market will surge and cause you to sell too many coins, you can choose a Decumulator without a multiple or lower the multiple. However, the execution price premium of a plan without a multiple may be relatively limited (because the counterparty will not give you too high a premium without the protection of the multiple clause). The higher the multiple is, the more favorable the execution price (higher premium) the issuer is usually willing to give because you bear more risks. This trade-off depends on your expectations: if you judge that the price is unlikely to rise sharply and break through the execution price, you can boldly use the multiple in exchange for a high premium; but if you are unsure and don’t want to sell too many coins, you might as well sacrifice a little premium and choose a structure with no multiple or a moderate multiple such as 1.5x.
Knockout price position
The knock-out price determines the bottom line that you can continue to sell when the price falls. The lower the knock-out price is (the farther away from the initial price, for example, set at 85% of the initial price), the greater the decline your contract can tolerate, and it is not easy to be knocked out prematurely, but the risk of the issuer increases accordingly, and you may not be given too high a premium at the execution price or require other additional conditions. The higher the knock-out price is (close to the initial price, such as 90%), the greater the risk of your knock-out, and the game will be over if it falls below the slightest sign of trouble, but the execution price and other aspects may usually be more favorable. When choosing, mainly consider your tolerance for downside risks: if you cannot accept the result of a sharp drop in the price of the currency but not selling many coins, you can set the knock-out price lower to keep the contract as unsuspended as possible (of course, if it really falls so much, the more coins you sell, the better); on the contrary, if you are worried about the coming of a bear market and hope to stop and take profits as soon as possible, then it is better to set the knock-out price higher, and once it falls to that level, you will admit the loss and stop, and keep the remaining coins for the next opportunity or make other arrangements.
Daily sales volume
This parameter actually depends on the total amount and duration of your planned reduction. Daily basic selling volume = total target reduction volume / (contract days). You need to comprehensively consider the most extreme multiples to avoid designing a plan where you cannot supply so many coins in the worst case. For example, if you only have 50 BTC in total, but set a daily sale of 1 BTC, a term of 60 days, and a multiple of 2 x, then if the double is triggered every day, you need to sell 120 coins, which is obviously impossible. So be sure to leave room when setting the daily selling volume to ensure that you can deliver the coins even if the multiple is triggered. Generally, the platform will also remind or directly require a certain number of coins to be locked to ensure performance when signing the contract. For ordinary investors, it is not recommended to use 100% of the holdings as Decumulators. It is best to use only part of the holdings to participate and leave some surplus to deal with unexpected situations. At the same time, the daily selling volume also involves the rhythm of income: although a small amount is safe, the reduction is not refreshing enough, and a large amount can be cashed out faster but the risks are also concentrated. You must find a balance that suits you.
Finally, it is recommended that you communicate more with the platforms professionals when choosing a specific Decumulator solution. Some leading platforms (such as Matrixport) provide parameter simulation and professional customer service consultation, and can give solution suggestions based on your risk preference. For example, Matrixports interface will simulate the expected annualized rate of return and risk exposure under different strike prices and term combinations for your decision-making reference. In addition, some products have special terms such as a guarantee period (guaranteeing that a certain amount will be executed in the first few days, and even if the knock-out is triggered immediately, you will be allowed to sell at least this part), and it is also important to understand these clearly. In short, only by tailoring and knowing yourself and the enemy can you choose a Decumulator that meets your needs.
8. Risk Warning: What risks should you pay attention to?
Although we have been emphasizing the advantages and applications of Decumulator, it is essentially a high-risk product that contains derivatives. Investors must understand the risks before participating. The following points need special attention (here try to explain in plain language):
Missed the opportunity for a big rise in the market
This is the biggest cost of the Decumulator. If Bitcoin subsequently rises sharply beyond your strike price, the coins you sell through the Decumulator will be traded at a lower price, which is equivalent to earning less of the price difference caused by the subsequent rise. Moreover, the higher the price, the more you sell (the multiple clause takes effect), which will reduce the number of coins you hold and share less of the subsequent rise. In extreme cases, if the price of the coin soars all the way, you will find that the price of the coin you sold is far lower than the market peak, and you will look back and think, It would be great if I didnt sell it. This missing the opportunity mentality and actual loss of profit must be weighed when participating in the Decumulator. If you are particularly optimistic about long-term gains, the Decumulator may not be suitable for you.
Knocked out in advance resulting in unsold
On the other hand, if the market crash triggers a knock-out, your contract may be stopped soon, and the coins you originally planned to sell will be forced to stop before they are sold out. At this time, the remaining coins are left in your hands at a lower market price, and you missed the opportunity to sell them at a higher price. For those who really want to reduce their positions, this is indeed a risk: you want to sell but don’t sell, and the market gets worse. Of course, some people will say that this is not a loss, because the coins are still in your hands and it is just a paper loss. But if you originally wanted to cash out, it is a loss if the knock-out makes your cash-out goal fail. Especially for miners/institutions that need cash flow, be mentally prepared to accept this possibility.
Selling volume is magnified (multiple risk)
The multiple clause will greatly amplify your selling volume under certain market conditions, which is a double-edged sword for investors. On the one hand, if you sell more coins, it means that you can reduce your position faster and get more cash; but on the other hand, this usually happens when the price is high. You could have sold less coins and waited for a higher price, but you had to sell more because of the contract requirements. When the multiple is triggered, each coin you sell is locked at the execution price. For example, when the market price is $130k, you sell double the amount at $115.5k, and the extra coins you sell have a potential loss of $14.5k per coin in additional income. The existence of the multiple clause makes your worst result worse than you think: without the multiple, you miss the benefits of the price increase, and with the multiple, you may even sell more chips at a loss. Therefore, you must be clear about the amplification effect brought by the multiple, and dont ignore it because you are greedy for a high premium. When choosing a Decumulator with a higher multiple, be sure to ask yourself whether you can accept selling so many coins in the most extreme case, and each coin may be sold for a lot less money than the highest price. If you cannot accept it, you should lower the multiple or consider other products.
Leverage/Margin Risk
Strictly speaking, it is best for ordinary investors to participate in Decumulator with their own cash, so that every coin sold is actually owned by you. It is not recommended to borrow coins or use leverage to participate in Decumulator. Once leverage is used, there are risks of margin and forced liquidation: if the market is unfavorable (for example, if the price plummets, you may need to add margin to maintain the contract; if the price soars, you may be forced to buy and close the position if the borrowed coins are not enough). Imagine if you only have 30 coins but want to sell 60 Decumulators, then when the price rise triggers a double, you simply cannot take out enough coins to fulfill the contract, and the platform will ask you to add assets, otherwise it will close your contract or even use your collateral. This will make things worse for you. Therefore, you must do what you can and participate in Decumulator with spot positions as much as possible. If you need to use leverage, make sure you have sufficient funds to support it and set up a stop-loss plan. Platforms such as Matrixport usually have risk control mechanisms to remind or limit participation in excessive leverage, and investors themselves should be more cautious.
Liquidity and Contract Limits
Decumulators are usually over-the-counter agreements with poor liquidity and cannot be unilaterally withdrawn during the contract period. In other words, once you sign a contract, you must sell the coins every day as agreed (unless a knock-out is triggered or it expires). You cannot regret and say I dont want to sell anymore or request to modify the quantity during the contract, otherwise it will be a breach of contract and you will need to pay a high penalty. This is completely different from buying and selling spot goods - you can buy and sell spot goods at any time, but after the Decumulator is locked, you are bound to this plan. Therefore, make sure that you are mentally and financially prepared to perform within the commitment period. In addition, there is no secondary market to transfer your contract at any time. If you want to withdraw, you can only negotiate with the issuer to hedge and settle in advance, which may result in losses. Therefore, before participating, you should read the terms of the contract clearly, understand your obligations and loss limits in extreme cases, and do not fight a battle without confidence.
In short, Decumulator is not a magic tool that guarantees profit without loss, but a tool that uses certain risks to exchange for specific returns. The Hong Kong Monetary Authority has reminded investors that the risk of accumulator options is that there is no bottom when it falls, and there is an upper limit when it rises. Although that is about stock accumulators, it also applies to Decumulators (just in the opposite direction: if the price rises, your profit is limited, and if it falls, you still have to sell coins and lose money). Investors need to fully understand this and not treat complex products as simple arbitrage. We strongly recommend that you conduct risk simulation before using Decumulator: assume that the most extreme market conditions occur and see what results you will bear. If you cannot bear that result, it means that this product or parameter setting is not suitable for you. Rational evaluation and self-knowledge of stop loss are much better than regretting it afterwards.
In addition, some platforms provide insurance or risk control services to reduce risks. For example, Matrixport strictly reviews user qualifications, limits the maximum amount of participation, and provides regular risk reports when designing products. These are all to help investors stay within their tolerance range. But in the final analysis, you are responsible for your assets, and any investment decision should be made with caution.
9. Comparison between Decumulator and Accumulator
To fully understand Decumulator, lets briefly compare it with several common related products, especially its twin brother Accumulator, and other structural tools:
Accumulator
This is a mirror product of Decumulator, which allows investors to gradually buy assets at a discount. Accumulator is often used when investors are bullish on an asset and want to lower the average price of opening a position. For example, in a bear market or a volatile market, investors use Accumulator to buy a certain number of coins at a price lower than the market price every day, thereby gradually accumulating positions. If the price rises above a certain threshold (knockout), the contract ends early; if the price falls, investors may need to double the amount of coins. The risk of Accumulator is that the more you buy in a bear market, the more you lose, so it has the nickname of lure and then cut people. The opposite of Decumulator is that the more you sell in a bull market, the more you sell, and the risk is missing out on rising gains. However, Decumulator is more useful for specific groups of people, because there are often more people in the market who want to reduce their holdings than those who want to increase their positions (especially when the coin price is high). It is a common demand for miners and project parties to cash out in a bull market, so the practicality and popularity of Decumulator in the crypto circle are even higher than Accumulator. It can be said that Accumulator is for bullish position building services, and Decumulator is for cashing out and reducing positions, each taking what they need.
Dual Currency (dual currency financial management) and other income certificates
Dual Currency Investment is a simple structured product that obtains fixed income or exchanges for designated currencies through two outcomes: bullish and bearish. In contrast, Dual Currency does not have a cumulative delivery process, and usually only has a one-time settlement result upon maturity, either taking interest or exchanging the currency. Decumulator is a series of operations with continuous daily sales and continuous delivery. This makes Decumulator more complex but also more tailor-made - it really sells your currency slowly, while Dual Currency only decides whether to give you interest or currency, and does not directly reduce your position. For investors who really want to reduce the number of coins, Decumulator is more direct and effective; Dual Currency is more like a short-term yield enhancement product, which does not necessarily reduce holdings (sometimes it may even turn stablecoins into coins).
In general, the unique advantage of Decumulator is that it is designed for reducing holdings. For those who clearly want to reduce their positions (miners, large investors, etc.), products such as Accumulator do not solve their problems, but Decumulator is just what they want. Compared with some other structured notes, Decumulator has a real delivery process of underlying assets, allowing investors to gradually achieve their reduction goals. So we see that in the actual market, when the price of the currency is in high-level fluctuations or in the late bull market, Decumulator often becomes a popular choice for institutions and large investors to cash in and lock in profits. Accumulator appears more often in the late bear market or at the bottom of the shock to layout long positions.
It is worth mentioning that Matrixport, as a platform that launched Decumulator earlier in the industry, has fully utilized the products fit for the demand for reduction. Many miners and project parties have successfully reduced their holdings at high prices through Matrixports Decumulator, and the official has also shared relevant cases and experiences. Among them, the advantages of daily observation, flexible parameter setting, and professional customer service guidance make investors more assured to use it. When comparing various products, these soft advantages at the service level are often overlooked but very important. A good platform can help customers better customize products, control risks, and improve transaction efficiency. For example, Matrixport has a professional risk control team that tailors knock-out prices and multiples for customers, trying to meet customer profit goals while ensuring transaction security, all of which make Decumulator more valuable.
10. Conclusion
Through this article, we have introduced the Decumulator structured product in an easy-to-understand way. From basic concepts, mechanism parameters, to actual cases, applicable populations, to risk analysis and product comparison, we hope to give you a comprehensive understanding of this tool of gradually selling coins at high prices. For friends who hold a large amount of crypto assets and need to cash out, Decumulator provides a clever solution: lock in the selling price range for a period of time in the future, gradually reduce holdings without drastically affecting the market, and obtain premium income at the same time.
Of course, any investment tool has its scope of application and risks. The problems that Decumulator can solve are usually accompanied by corresponding costs. The key is that investors know what they want and what they can afford. If you decide to try Decumulator, you must combine the key points mentioned in this article, carefully select parameters and do a good job of risk management. It is recommended to choose a platform with a good reputation in the industry, such as Matrixport, which not only has mature product design, but also has professional team guidance. Every step from account opening, contract signing to settlement is clear and transparent. As Matrixport advocates, Professional things are left to professionals. Make good use of these innovative financial tools to better serve your investment strategy.
I hope this popular science article has given you a clear understanding of Decumulator. On the road of crypto investment, knowledge and insight are equally important. I wish you will be able to make investment decisions with ease in the future, and be able to seize profits while managing risks!
