Market volatility makes you wonder how to choose investment targets? Matrixport Dual Currency helps you realize asset appreciation!

This article will introduce in detail the product principles, usage scenarios and product risk control of Matrixport Dual Currency, helping you quickly understand dual currency investment and realize asset appreciation.

What is “dual currency investment”?

"Dual Currency Investment" is a non-principal-guaranteed financial product consisting of two crypto assets. "Dual Currency Investment" can be divided into two directions: "Sell High" and "Buy Low". By comparing the linked price (target price) and the settlement price to determine the settlement method, users can enjoy the stable income of one of the currencies in "Dual Currency Investment".

Simply speaking, choosing to sell high is equivalent to selling a call option, and choosing to buy low is equivalent to selling a put option. As a relatively mature financial product, "Dual Currency Investment" has unique advantages compared to other investment methods. Compared with contracts, dual currency investment can ignore the volatility risk before reaching the linked price and avoid the corresponding risk of liquidation; compared with spot, dual currency investment will save the order handling fee.

However, it is worth noting that even for dual-currency products with the same investment direction and the same investment period, different linked prices (target prices) will lead to different yields at maturity. If you choose "sell high", the closer the linked price is to the spot price, the higher the yield; if you choose "buy low", the farther the linked price is from the spot price, the higher the yield. The higher the yield, the higher the risk, which requires investors to have a strong sensitivity and judgment on changes in market trends.

How does the “peg price” affect yields?

Here is an example:

Scenario 1: Assume that A purchases a BTC-USDT "high sell" product with a term of 9.1 days (to be settled on July 12) on July 3, with a purchase amount of 1 BTC. The current price of BTC is $60,954, the pegged price is $63,000, and the annualized yield is 27.22% (yield to maturity 0.67%).

• On July 12, BTC price was below $63,000 (peg price), and BTC will be used as the settlement unit

Refund = Subscription amount * (1 + Yield to maturity)

= 1*( 1+ 0.67% )

= 1.0067 (BTC)

Potential Profit : If the BTC price fluctuates in the short term from the purchase date to the expiration date (fluctuating between the linked price and $60,548), A will realize the appreciation of U-standard and currency-standard at the same time, earning more BTC while holding the currency, satisfying the demand for hoarding coins.

Potential risks : If the BTC price falls below $60,548 on the expiration date (the break-even point, which can be viewed on the Matrixport dual-currency product details page), the BTC assets held by A will still gain currency-based appreciation (i.e., the number of BTC will increase), but at the same time, A will also face USDT losses (BTC price falls, and the corresponding USDT value of the same amount of BTC decreases).

• On July 12, BTC price is higher than $63,000 (peg price), BTC will be sold at $63,000, using USDT as the settlement unit

Refund = Subscription amount * Linked price * (1 + Yield to maturity)

= 1* 63000*( 1+ 0.67% )

= 63000* 1.0067

= 63422.1 (USDT)

Potential profit : If the BTC price breaks through $63,000 (peg price) on the expiration date and then falls back, A will successfully sell BTC at a high price and gain an increase in yield income.

Potential risks : If the BTC price exceeds $63,000 (pegged price) on the expiration date, BTC will be sold at the linked price. If the BTC price continues to rise and breaks through $63422.1 (break-even point, which can be viewed on the Matrixport Dual Currency Product Details Page), the yield earned by A during the holding of the dual currency product cannot make up for the difference between the BTC selling price and the current price.

Scenario 2: Assume that A purchases a BTC-USDT "buy low" product with a term of 1.1 days (to be settled on July 4) on July 3, with a purchase amount of 10,000 USDT. The current price of BTC is $60,954, the pegged price is $59,500, and the annualized yield is 28.09% (yield to maturity 0.08%)

• On July 4, the BTC price is below $59,500 (peg price), and BTC will be bought at the peg price of $59,500

Refund = Subscription amount / Linked price * (1 + Yield to maturity)

= 10000/59500*(1+ 0.08%)

= 0.16820 (BTC)

Potential Profit: If the BTC price briefly drops to the hook price of $59,500 on the expiration date and then quickly rises, A will successfully buy the dip by purchasing the low-selling product.

Potential risks: If the BTC price falls below the hook price of $59,500 on the expiration date but the downward trend remains unchanged, A will fail to bottom-fish and will need to dynamically adjust the position to balance the cost.

• On July 4, the BTC price was higher than $59,500 (peg price), and the conditions for purchasing BTC were not met. USDT will be used as the settlement unit.

Refund = Subscription amount * (1 + maturity yield)

= 10,000*(1+ 0.08%)

= 10,008 (USDT)

Potential profit : If the BTC price fluctuates slightly during the holding period (the settlement time does not reach the linked price), A can enjoy an annualized return of 28.09%.

Potential risks : If the BTC price on the expiration date is higher than the pegged price but the BTC price falls below the pegged price during the holding period, A will face the problem of failure to get on board.

“Dual Currency Investment” Usage Scenarios

Reasonable selection of "dual currency investment" products according to market conditions can meet users' needs for profit-taking, bargain hunting, and coin hoarding . If users believe that the market trend will be volatile in the future, they can choose dual currency products with appropriate cycles and the price fluctuates between the upper and lower thresholds, so that users can obtain higher returns; if users believe that the future will enter a stage of short-term decline and subsequent recovery, choosing "buy low" products with appropriate cycles can not only bargain hunt at a lower price, but also obtain financial management income; if users believe that the market trend will be an upward correction, choosing "sell high" products has the opportunity to achieve high-point profit-taking. However, it should be noted that if you want to obtain more returns, you need to have a more accurate market judgment, and rash attempts may cause unnecessary asset losses.

Currently, Matrixport’s “dual-currency investment” product supports 12 assets including BTC, ETH, ARB, BCH, BNB, ORDI, OP, etc. It supports a wide range of investment cycles from 0.1 to 287 days and supports early redemption . Users can choose suitable products as needed.

Disclaimer: The above content does not constitute investment advice, an offer to sell, or a solicitation of an offer to buy to residents of the Hong Kong Special Administrative Region, the United States, Singapore, and other countries or regions where such offers or solicitations may be prohibited by law. Digital asset trading may be extremely risky and volatile. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.