One of the more sophisticated methods of making money is a dual investment, which offers a mechanism to purchase or sell a cryptocurrency at the price you want at the time you choose in the future. No matter where you stand in the market, you will always make a high-interest income.
You can also read: Anyswap to officially rebrand as Multichain (ANY)?
Now that we are aware of the fundamental idea, how precisely do we begin making money? In reality, there are numerous applications for dual investment. Each one can supplement your market predictions and trading plans. Here they are:
1. Taking profits
Taking some profits while you can is usually a smart idea, even though it may be simple to get carried away. By using this specific dual investment technique, you can earn additional returns and eventually cash in on some of your cryptocurrency winnings. Here is an example in Binance exchange:
- On Binance Earn, choose the Sell High Dual Investment product. We’ll examine an Ethereum product in this illustration. The price of Ethereum right now is $2,900.
- The Target Price will be established at $3,500, and the Settlement Date will be in a week.
- If the Target Price is attained on the Settlement Date in a week, we will then have the opportunity to sell the deposited Ethereum at that price. Ethereum will be sold for BUSD if its value on the Settlement Date is 3,500 BUSD or higher. This eliminates the possibility of forgetting or refusing out of greed to take your profits! Furthermore, you will be paid APY at the same time.
- You will continue to earn APY on the deposited ETH and receive the ETH back if your Target Price is not met on the Settlement Date.
2. Buying the dips
Buy-the-dip investors reserve capital to make acquisitions when the stock market declines and only buy equities under specific circumstances.
If a stock price declines when the market is on an upward long-term trend, some investors might buy the dip. Several investors in today’s market have had success using this approach during the recent bull market.
Market reversals can be frightening. But generally speaking, the market will recover and reach a new high following a dip. Consequently, the buy the drip technique frequently succeeds.
Investors that expect an upturn and are prepared to wait for a future increase in the stock price may buy the dip in the absence of a bull market.
An investor decides on a threshold for a price decrease and saves money in the interval in order to buy the dip. If the barrier is 30%, the investor won’t buy until the stock price has fallen by more than 30% from its most recent high. They purchase the stock, wait for it to reach a new high, and then get ready to purchase after a subsequent 30% collapse.
The purchase of the dip carries risks. If the market starts to move strongly upward, it might be some time—possibly years—before there is another 30% decline. When there is a pullback, they will be purchasing the stock at a premium above the previous purchase price rather than at a discount.
The greater the threshold percentage, when the approach is successful, the more an investor would profit. However, there could be significant losses if it doesn’t work.
3. Growing your HODLed crypto
Hodling can be a safer alternative for investors since it reduces their exposure to short-term volatility and eliminates the risk of buying high and selling low, which is a common occurrence in the cryptocurrency market. Even when the market declines or becomes extremely volatile, true hodlers are likely to keep holding onto their coin or token.
You don’t necessarily have to bet on market fluctuations when you engage in dual investment. In reality, you can still benefit from the product even if its price is fairly stable or falls short of your target price. In this case, our only goal is to profit from interest on cryptocurrency.
4. Growing your stablecoin stash
With this method, you can get interest in your stablecoin investment. Because we don’t aim to attain the target price with this method, the process is fairly similar to the prior one.
We’ll use the Buy Low Investment product in this instance. For the purposes of this example, we’ll utilize an ETH product with an initial cost of $2,500 that was purchased with USDC.
The target price will then be established at $2,300 with a two-week settlement window. We hope that ETH’s price stays stable or rises and doesn’t reach the Target Price in order to earn stablecoin APY.
You can withdraw your stablecoin at the new ETH price, plus the interest that has accumulated since the settlement period began if the price of ETH rises to $2,700 on the Settlement Date.
5. Compound earning in a short-term volatile market
This product is more intricate than the other tactics mentioned above, and it entails taking advantage of the erratic markets to generate gains quickly. The method combines Buy Low Investment and Selling High Investment items.
We’ll choose the Sell High Dual Investment product for this technique and utilize a BTC product as an example. Assume that the asset currently costs $25,000 to own. The target price will then be set at $30,000 with a two-week settlement window.
One of two things could occur if the market was volatile throughout the settlement period.
The investor can withdraw their BTC and receive APY if the target price isn’t reached.
You’ll sell your Bitcoin for $30,000 if the target price is achieved. Now, you may use a Buy Low order to buy cryptocurrency for a reduced price while also earning interest.
The investor places a Buy Low order to increase earnings if the Sell High product’s target price is reached. If the goal price is not reached, the investor makes price adjustments in the same order until it is.
The compound earning technique, which entails a thorough market study, is primarily employed by experienced investors.
6. Double-sided positions
The only difference between the double-sided position strategy and the earlier products is that in this instance, the investor simultaneously opens the Buy Low and Sell High orders.
You will have two tokens at the same value using this method, one in a stablecoin like BNB and the other in a cryptocurrency like BNB. Assume that BNB is now available at $280.
To start, use the BNB in the Sell High BNB Dual Investment instrument with a $350 target price and a two-week settlement date.
Then, using the stablecoin, you will place a Buy Low order with a target price of $230 and a settlement date that falls inside the same time frame as the previous transaction.
One of three outcomes is feasible, if the market is erratic over that time.
Since the price remains between $230 and $350, the Target Price for both positions is not achieved. In this instance, you will retain your initial BNB and USDT deposits as well as any APYs that you have earned in both currencies.
The second scenario allows you to sell your BNB for $380 with interest received during that time if the Sell High target price is met. The interest your Buy Low order receives in USDC will also benefit you.
Last but not least, if the goal price for the Buy Low order is met, you can keep your Sell High BNB deposit and any interest gained while purchasing your chosen BNB at the target price and throughout the settlement time. By using this strategy, you may purchase BNB for less money while also earning interest on it.
Whatever the market volatility, dual investments are undoubtedly a way to generate passive income. The product is therefore perfect for long-term investors, or HODLers, who wish to protect their position while reaping substantial rewards.