The cryptocurrency realm is a hotbed for investors keen to grow their wealth. With a vast array of trading strategies and investment products, investors are spoilt for choice. A notable example is Dual Investment — a structured product that has emerged as a popular product among crypto investors.

So, what exactly is Dual Investment? As its name suggests, it involves two different cryptocurrency assets and allows investors to earn high yields should the market move in their favour. This innovative approach to investing fits snugly within the broader crypto investment landscape. Crypto investors are always on the lookout for ways to maximise their returns and mitigate risks, and Dual Investment serves as such a tool. It sits alongside other investment options such as spot trading, futures trading, or staking, adding another layer to an investor's strategy.

In this article, we'll provide a comprehensive overview of what is Dual Investment and discuss its benefits and risks. We'll also illustrate with a case study so you can better understand how it works.

In the dynamic world of cryptocurrency, Dual Investment is a strategy that offers portfolio diversification and opportunities for high returns. But how does it work? A closer look at its mechanics will reveal that two critical factors come into play: the target price and the expiration price. Let's delve in deeper.

The target price is the value threshold that determines the type of currency in which the investors will be paid at the time of settlement. On the other hand, the expiration price is the time-weighted average price of spot contracts traded on major exchanges from 3:00 p.m. to 3:30 p.m. UTC +8.

Depending on your market view of a particular asset, you can decide between a "Buy Low" or "Sell High" product. When you subscribe to a Dual Investment product, the annual percentage rate (APR) and settlement date are fixed at the time of purchase. However, the type of coin for settlement is determined based on a comparison of the target price and the expiration price of the product at maturity. For a Buy Low product, if the Expiration Price is at or below the Target Price, the investment is "exercised", meaning that it will be settled in the alternate currency. Conversely, for a Sell High product, if the Expiration Price is at or above the Target Price, the same principle is applied, and the investment will likewise be settled in the alternate currency.

To further understand how Dual Investment works, let's illustrate with several case study scenarios. An investor, Alice, wants to invest in a "Buy Low" Dual Investment Product. These are the parameters for her investment:

Investment Amount: 10,000 USDT

Underlying Asset: BTC/USDT

Tenor: 3 Days

Target price: 29,500 USDT

Initial BTC price: 30,000 USDT

APR: 50%

In the first scenario, the Expiration Price of BTC is 31,000 USDT, moving above the Target Price. In this case, Alice will receive returns in USDT based on the following formula:

USDT Amount = Investment Amount + Return

Return = Investment Amount * APR * Duration / 365 = 10,000 x 50% x 3/365 = 41.09 USDT

Alice's total return = 10,000 + 41.09 = 10,041.09 USDT

In another scenario, the Expiration Price of BTC hits the Target Price of 29,500 USDT. This time, Alice's returns will be converted to BTC based on the following formula:

BTC Amount = (Investment Amount + Return)/Target Price

Return = Investment Amount * APR * Duration / 365 = 10,000 x 50% x 3/365 = 41.09 USDT

BTC Amount = (10,000 + 41.09)/29,500 = 0.339 BTC

Let's take a look at another example, where another investor, Bob, subscribes to a Sell High Dual Investment Product. These are the parameters for his investment:

Investment Amount: 1 BTC

Underlying Asset: BTC/USDT

Tenor: 3 Days

Target price: 30,500 USDT

Initial BTC price: 30,000 USDT

APR: 50%

In the first scenario, the Expiration Price of BTC hits the target price of 30,500 USDT. In this case, Bob will receive returns in BTC based on the following formula:

BTC Amount = Investment Amount + Return

Return = Investment Amount * APR * Duration / 365 = 1 x 50% x 3/365 = 0.004 BTC

In total, Bob will receive 1 + 0.004 = 1.004 BTC

In another scenario, the Expiration price of BTC moves above the target price at 31,000 USDT. In this case, Bob will receive returns in USDT based on the following formula:

 

USDT Amount = (Investment Amount + Return) * Target Price

Return = Investment Amount * APR * Duration / 365 = 1 BTC x 50% x 3/365 = 0.04BTC

In total, Bob will receive (1 + 0.04 BTC) x 30,500 USDT= 31,761.86USDT

In essence, Dual Investment operates on the principle of flexibility, enabling investors the chance to earn high returns while mitigating risks. It's a complex yet rewarding strategy that requires a keen understanding of market dynamics and a willingness to adapt to the ever-changing crypto landscape.

When it comes to maximising profits, Dual Investment offers a multitude of benefits that can help optimise your potential returns. One of the most significant advantages is the ability to earn yield and achieve a high Annual Percentage Rate (APR). In essence, dual investment gives you an opportunity to earn a high passive income regardless of which direction the market moves.

By setting a target price and date, you can buy or sell your cryptocurrency at the desired rate, and earn high rewards in the process. This ability to customize your investment strategy based on your risk tolerance and financial goals is one of the key advantages of dual investment.

Another enticing aspect of dual investment lies in the time-tested strategy of buying low and selling high. In the world of finance, this strategy is as old as trade itself. With Dual Investment, this principle takes on a new dimension. By using dual investment products, you can set a target price at which to buy or sell your cryptocurrency. This enables you to potentially profit from market fluctuations rather than merely weathering them.

For instance, “Buy Low” products give you a chance to buy your desired crypto at a lower price in the future with digital assets. If the market price is at or below your target price on the settlement date, you'll buy the target currency. If it's above, you'll keep your deposited digital asset. In both scenarios, you earn rewards in your deposited digital asset.

Similarly, "Sell High" products allow you to sell your crypto holdings at a target price, realising gains while also benefiting from additional rewards. This strategy can be particularly beneficial during market upswings, as it allows investors to capitalize on high prices and generate profits beyond the standard return rates.

To sum it up, Dual Investment empowers you to take control of your investments by offering flexible strategies tailored to various market conditions. For investors who prefer to HODL, Dual Investment provides a smart approach to earn passive income and grow idle crypto assets.

As with any investment tool or strategy, Dual Investment comes with high earning potential, but also inherent risks. The most significant risk lies in the fluctuating nature of market prices, which is second nature to the crypto investment landscape. Once you have subscribed to a Dual Investment product, your assets are locked until the settlement date. This fixed structure may pose a risk, especially if the market price moves further away from the target price, effectively causing you to miss out on opportunities for more favourable pricing.

The crypto market is known for its price volatility, and this can significantly impact dual investments. A sudden rise or fall in the market price relative to the target price can drastically change the potential returns or losses from your investment. This is especially true as the settlement date approaches. If the market price is less than the target price, you end up buying more cryptocurrency; if it's higher, you sell more. Such unpredictability requires investors to be vigilant and well-informed about market trends and movements.

While Dual Investment offers the potential for high returns, it's important to be aware that it also comes with its share of risks and challenges, particularly in a volatile market. As an investor, understanding these risks can help you make informed decisions about whether Dual Investment fits into your overall investment strategy.

In the realm of cryptocurrency investments, Dual Investment has emerged as a unique and promising strategy. It operates on the fundamental principle of buying low and selling high, allowing investors to earn from market fluctuations. Above all, it opens a new paradigm of earning potential, no matter which direction the market moves.

Get in touch with our Darwinbit team, if you’re keen to feature Dual Investment on your platform!