How to make money on dual currency investments
In addition to cryptocurrency savings, staking, or profitable farming, it is possible to earn passive income on dual currency investments. The majority of the top cryptocurrency exchanges offer this type of earning in a variety of currency pairs with different expiration dates.
Dual investment is a short-term investment tool for generating passive income from the fluctuation in the value of a particular market asset. You only need to correctly predict the direction of the price movement of the chosen cryptocurrency (BTC, ETH, etc.) over a specific period (typically 1, 7, 30, or more days, though there are offers for hours) to enter into a deal.
The investor receives income in USDT or the selected asset at the end of the agreed-upon period.
Who is this investment product aimed at, and what are its benefits?
A dual investment will appeal to investors who want to:
- earn in USDT or increase investment portfolio with top cryptocurrencies;
- find a substitute for the high-risk margin market or the low-yielding spot market;
- minimize losses or accumulate assets even during a downtrend;
- benefit from higher returns than passively keeping money in wallets during an uptrend;
- predict a short-term flat market in which the prices of two crypto assets in the selected currency pair will essentially remain unchanged.
Advantages of a dual currency investment:
- higher profitability – if the investor correctly predicts the price direction of the chosen asset, they can earn up to 150% annually or more;
- ideal for owners of top cryptocurrencies (USDT / BTC / ETH and other popular altcoins) who want to increase their amount on the balance sheet or make a profit in stablecoin;
- short terms – a short term of the deal (from a few hours to a few days) allows you to change the forecast often, taking into consideration market trends.
An example of a deal
Let's use the BTC-USDT currency pair as an example to examine how the profit accrual system functions.
By selecting the "Sell BTC at a higher price" option, the investor bets on selling BTC at the highest possible price after the asset's value reaches a predetermined level. If this does not happen, then get more BTC. If the BTC price at the time the contract expires is higher than the target, your BTC will be sold at a higher price, increasing the profit in USDT (the investor's prediction is fully justified). When the contract expires, if the price of Bitcoin is below the target level, the investor has the option of accumulating additional BTC.
The "Sell BTC at a higher price" scheme
Scenario 1: If the price is below the target, the investor will earn additional BTC.
The amount received by the investor at the end of the contract term is calculated as follows: prepaid amount x (1 + annual rate / 365) = amount of BTC.
Scenario 2: If the price is greater than or equal to the target, BTCs are sold at a higher price than the prepaid price.
The amount received by the investor at the end of the contract term is calculated as follows: prepaid amount x target price x (1 + annual rate/365) = USDT amount.
The investor selects the "Buy BTC at low price" option in anticipation of a decline in the BTC price and tries to buy it at the lowest price after the asset's value reaches the target level. If not, get more USDT. If the price of BTC is higher than the expected target price when the contract expires, the investor will earn more USDT. If the price of BTC at the time of contract expiration is lower than the target, the investor will, as expected, buy BTC at a lower price.
The "Buy BTC at a low price" scheme
Scenario 1: If the price is below or equal to the target, BTC is bought at a price below the prepaid price.
The amount received by the investor at the end of the contract term is calculated as follows: prepaid amount / target price x (1 + annual rate / 365) = amount of BTC.
Scenario 2: If the price is higher than the target, the investor will earn additional USDT.
The amount received by the investor at the end of the contract term is calculated as follows: prepaid amount x (1 + annual rate / 365) = amount of USDT.
Risks
There are some risks to using this investment tool:
- The amount of assets is blocked once the deal is activated, so there is no way to cancel the deal or return the assets before the expiration date.
- It will be impossible to buy or sell assets at a favorable price if the price is far from the target.
- In the event of unfavorable market changes after the expiration of the validity period, the amount of the asset after calculation may be less than the initial deposit amount.
- The transaction is carried out solely based on the current price at the time of closing (one hour before the transaction's expiration).
Conclusion
Although this investment tool initially appears complex, it actually enables you to lose less in a declining market than traders who were out of the market and did not have enough time to sell off the assets at the highs. Furthermore, a dual investment enables holders or traders who were out of the market or even holding long positions in the spot market to profit significantly more from the rising market.
It is worth trying to use a dual investment and make a profit under any scenario in order to understand its mechanism of action.
