This article will introduce what is dual currency investment, how to understand how to buy at the reference price of the hook? And what are the platforms that recommend dual currency investment? The biggest feature of dual currency investment is to invest a certain amount. After the delivery time, if the amount reaches the predetermined amount, it can be exchanged for another currency originally selected. If the price is not reached, then According to the currency invested, plus interest will be refunded to you.
Simply talk about dual currency investment: buy the right direction and give you a high annualized return, buy the wrong direction and give you low-priced coins.
- Delivery date – This is when you can redeem your crypto with the interest that you earned.
- Strike price – The price threshold that determines which settlement currency you’ll get paid in. This price is fixed at a predetermined level upon entering a Dual Investment product.
- Settlement price – Average of the spot price in the last 30 minutes before 08:00 (UTC) on the delivery date.
- Annual percentage yield (APY) – The interest you’d earn if you’d lock your crypto in a Dual Investment product for a year, including compounded interest. For example, if your APY is 36.5%, then an estimation of your daily effective return is 36.5% / 365 days =0.1%.
- Underlying asset – The reference asset in a Dual Investment product. For example, if you deposit BUSD and bet on BTC’s price to go lower, the underlying asset is BTC. The Strike price, Ref. Spot price and Settlement Price are all tied to the underlying asset.
What is dual currency investment?
"Dual currency investment" is a popular digital currency derivative financial product in the cryptocurrency circle. It has the characteristics of non-guaranteed floating income. As the name implies, it is a product denominated in "two currencies".
During the predetermined period, the mode of operation of dual currency investment is:
Put in a certain amount and wait until the delivery time. If the amount reaches the predetermined amount, it can be exchanged for another currency originally selected. If the price is not reached, it will be refunded to you according to the currency invested plus interest.
In addition to BTC, USDT, and BUSD for dual currency investment, there are also various options to choose from. All dual currency investment options are different except for the annualized rate of return, hook price, and delivery date. There is a supply limit for this product. In other words, even if the product is released, you may not be able to buy it!
Where to buy dual currency investment?
Currently, dual currency investments can be bought on Binance and Matrixport.
Let’s take Binance’s dual-currency wealth management product as an example. The demo data is as follows:
Hook reference price: 40000USDT
Cycle: 31 days
Annualized rate of return: 80%
Investment currency: BTC
If user A purchases this product for 1 BTC on June 1, 2021, on July 1, 2021:
If the BTC price is <40000
User A gets the income of (31/365*80%)*BTC price, which is the return of 1.067BTC, the income is 0.067BTC
If BTC price>40000
User A gets (31/365*80%)* the income of the linked price, which is 1.067*40000USDT=42,680, and the income is 2680USDT
Simply put, no matter what the relationship between the final price and the pegged price is, the user can get (31/365*80%), which is 6.7% of the income. It is uncertain whether the currency obtained is BTC or USDT.
Dual currency investment is actually similar to Matrixport’s "Trend Zhiying" product, but Trend Zhiying has one more guaranteed return. For details, please refer to:
Matrixport Product Introduction
Three reasons: why buy dual currency investment?
Dual currency is more flexible and flexible
As mentioned above, entering the era of zero interest rates, money in banks will only become thinner and thinner, but many people who have been waiting and watching are worried about the exaggerated rise and fall of cryptocurrencies and will not be able to enter the market for a long time. At this time, cryptocurrency-derived products will It comes in handy. The annualized interest rate of dual currency investment is much higher than that of banks, and the contract period is from two weeks to one month. In the case of relatively low risk, dual currency treasure has the characteristics of short-term profit and return. It is also more flexible and flexible than fixed deposits.
Dual currency can expect high interest rates
Dual currency investment has a highly predictable interest rate. According to the information on the official website, the highest annual interest rate of Dual currency treasure has reached 90%. The so-called annual interest rate means the interest rate that can be obtained if stored for one year, so what we get will be The annualized interest rate is multiplied by 365ths of the actual contract days, so the only difference is that if the linked price is reached, it can be exchanged for another currency. If it is not reached, the original currency invested will be maintained for you.
Dual currency is good for long-term holding
The virtual currency market fluctuates and fluctuates greatly. Whether it is spot or contract, 24 hours of uninterrupted trading, there is no limit on the rise and fall. Sometimes a tweet by Elon Musk can cause a currency to skyrocket or plummet, so long-term holdings At that time, the risks and psychological pressures were not small. Therefore, if you want to invest a certain amount of money in the cryptocurrency market and earn a certain amount of interest by holding it for a long time, dual currency investment is really a choice worth considering.