1. What is dual-currency wealth management?
Dual currency wealth management products are short-term investment products involving two different cryptocurrencies. Investors can use any digital currency stipulated in the contract to buy Dual Currency Products, and the final settlement currency type is determined by the settlement price and target price on the maturity date. It is a non-principal-guaranteed wealth management product with a variable return -- that is, returns that are adjusted based on a predetermined basis known as a "pegged price."
With dual-currency financial management, you can conduct cryptocurrency transactions anytime and anywhere, and you can still obtain high interest returns regardless of market trends.
The rate of return provided by dual-currency wealth management changes with the market, but the rate of return is fixed after the investor confirms the purchase, and once the purchase is successful, the order is irrevocable, and it does not support early redemption before it expires. After the purchase, when the settlement period comes, the investor can ensure the fixed guaranteed income of the original investment currency, but the investment currency may be converted into another currency due to market fluctuations, which is also the reason why dual-currency wealth management attracts investment The greatest characteristic of the person.
In short, dual currency banking allows you to deposit one cryptocurrency and earn income based on two assets. After investing in your encrypted assets, by locking in the rate of return, you can earn income when the value of the invested assets increases. How much you earn will depend on the final performance of your pledged assets at maturity.
The value of assets in the crypto market fluctuates continuously. Subscribers can take advantage of this trend when using Shuangbibao products to achieve predetermined benchmarks and earn income from it. If the settlement is higher than the benchmark, the invested digital currency will be purchased (sold) and converted into another currency. For example, the settlement currency of a BTC dual-currency wealth management product purchased with BTC is determined to be BTC or USDT based on the settlement price at maturity. If the settlement price is higher than the target price, you will earn USDT; if the settlement price is lower than the target price, you will earn BTC.
*Please ensure that you fully understand the product and risks before investing in dual-currency wealth management.
2. When to use dual-currency wealth management?
Here are some use case scenarios:
- Profit: In order to realize part of the investment profit and obtain higher interest income, sell the cryptocurrency held at the target price;
- Buy at a low price: When the market falls, buy cryptocurrencies at the target price, and obtain a higher interest rate by "buying the decline";
- Additional cryptocurrency purchase: you already own some cryptocurrency and want to continue to profit from it;
- Additional purchase of stablecoins: You already own some stablecoins and want to continue to profit from them.
3.How to calculate the benefit?
Example 1: Take BTC/USDT dual-currency wealth management products for 31 days as an example:
User A buys 1 BTC of a dual-currency wealth management product with a target price of 20,000 USDT. When the product is due for delivery on December 1, 2022:
Scenario 1: The price of BTC/USDT on the maturity date is less than 20,000 USDT, and the payment will be settled in BTC. The payment amount = 1 BTC * (1+100%/365*31) = 1.0849 BTC
Scenario 2: The price of BTC/USDT on the maturity date is ≥ 20,000 USDT, and USDT is used for repayment settlement. Refund amount = 1 BTC * 20,000 * (1+100%/365*31) = 21698.63 USDT
Example 2: Take the example of buying a 31-day BTC/USDT dual currency wealth management product by investing in USDT at a low price:
User B purchases a product above 20,000 USDT with a target price of 20,000 USDT. When the product expires on December 1, 2022: Case 1: BTC_USDT price on the expiry date ≤ 20,000 USDT, and the payment will be settled in BTC. Amount=20,000USDT/20,000 * (1+100%/365*31)=1.0849 BTC
Scenario 2: The price of BTC_USDT on the expiry date is > 20,000 USDT, and USDT is used for repayment settlement. Refund amount = 20,000 USDT * (1+100%/365*31) = 21,698.63 USDT
To sum up, users can get 108.49% of the money back when the product is due for settlement. However, due to the numerical relationship between the price on the due date and the target price, there are differences in the currency of the money back that the user finally receives.
4. What are the advantages and risks of investing in dual-currency wealth management?
Like any other financial instrument, dual currency wealth management investment products also have their pros and cons. It is like a double-edged sword, so you must fully understand its potential and risks before investing. After fully understanding, you can use dual currency wealth management products! The following are some advantages and disadvantages of dual currency wealth management products:
Advantage
- Opportunity to earn high returns
- Offers hedging opportunities
- Unaffected by market fluctuations, you can earn income anytime
- Flexible investment: investors can flexibly determine the pre-agreed execution level according to market sentiment and desired risk-return
risk
- During the subscription period, you cannot withdraw assets, so some liquidity will be sacrificed.
- The level of income obtained will only depend on the final performance of the assets you pledged on the maturity date.
5. Explanation of terms
annual interest rate
The annual interest rate will change in real time with the market, and the actual annual interest rate shall be subject to the successful purchase. Annual interest rate = rate of return / position period * 365*100% position period = maturity date - purchase date
expiry date
On the date when the investment product ends, the product will be settled at 16:00 on the due date, and the income and principal repayment will be automatically released to the spot account after the due settlement.
Investment Currency
The investment currency is the currency you actually use to purchase the product. Taking the BTC zone as an example, it is linked to the price of BTC/USDT. Now it supports investment in BTC or USDT currency.
Payment Currency
The payment currency is the currency actually received when the product is due for delivery and settlement. The currency used for settlement depends on the numerical comparison between the price of the linked currency and the target price when the product is due for delivery. Taking the BTC zone as an example, if you invest in BTC, you may receive a return in BTC or USDT.
target price
The target price is a benchmark price, or "pegged price", that determines the currency in which your benefits will be denominated. The expiration date price will be determined using this benchmark price on the expiration date. That is, if the price on the maturity date is lower than the target price, the product will be settled in the investment currency (take the BTC zone as an example); otherwise, it will be settled in USDT.
price at maturity
The investment product expires one hour before 16:00 (HKT), that is, the average price of Hotcoin's BTC or ETH index between 15:00 (HKT) and 16:00 (HKT).
