BigONE exchange offers savvy traders the opportunity to potentially earn big in dual investments. Although very lucrative, dual investments are not intended for beginner traders. The prospect requires a solid understanding of markets, a realistic expectation of potential price shifts, and a willingness to tie up funds for a set period of time. It should be kept in mind that if dramatic value fluctuations occur during the investment period that big losses could be suffered. Importantly, dual investment is best leveraged if the expected value of crypto remains steady, rather than jumping dramatically up or down.
At BigONE dual investments are offered in BTC, ETH and USDT.
Read on to get a better understanding of what dual investment is and how you can get involved at the BigONE exchange.
The underlying asset is the crypto that you’re dealing in, such as BTC or ETH. These are the currencies that you will be dealing with for the dual investment period. Note that BigONE only supports a limited selection of cryptos for these investment schemes.
The tenor is just a fancy way of referring to the investment period. At BigONE, dual investments are offered with set investment periods. When you choose to invest, each option comes with a number of days attached. Longer and shorter periods are available, though generally no investment period is less than seven days.
The flavour refers to the type of dual investment plan, with either upside or downside investments possible. Upside or downside simply refers to whether you predict that crypto price will rise or fall over the investment period.
APY refers to yield over the period of a year.
The strike price, or linked price, is the benchmark that is set for the investment. At the end of the investment period the market price will either be above or below this benchmark.
The settlement price is the value of the crypto at the end of the investment period. This will be in relation to the linked price.
Dual investment is made possible due to fluctuations in the value of cryptos. Importantly, the idea is that two different cryptos and their price fluctuations get compared to a predicted benchmark value. The difference between the linked value and actual value of the cryptos after the investment period expires determines the payouts. Though if the value of a crypto falls rather than gaining, or gains rather than falling, losses will also be sustained according to the difference.
In a nutshell, an amount of one crypto is invested and income on the investment is determined by the target price versus the actual price. However, it is important to understand payouts will be made in one crypto or the other depending on the outcome. It is also important to understand that once invested the crypto will not be available until the investment period expires. If you invest then that amount is locked in for the entire duration.
Upside investment is based around a crypto gaining value over a set period. After the investment period is expired the actual value of the crypto will either be above or below the predicted price. If the actual price is above the target value, this is referred to as being exercised. If the actual price is below the value this is referred to as not being exercised. The trader is aiming to not be exercised, which means that the yield is made without any change to the invested crypto.
As an example, you might want to invest your BTC for a period of 14 days. The market price of Bitcoin at the time of investment is 100. You decide that the value of BTC will not rise above 120 in the time period. 120 is then set as the linked price. Your decision is to invest 20BTC, with the intention of earning 50% annual percentage yield (APY).
At the end of the investment period there are two potential outcomes. Either the actual price is above or below your prediction. In either case, you still earn the 50% APY. If the product was exercised, the price moved against your prediction, your original investment will be lower than by the difference between your prediction and the actual value. Additionally, the investment will be converted into the second crypto in the dual investment scheme, then converted back into the original crypto.
If the product was not exercised you have made a profit. A payout will be made in the same crypto as the original investment. The original amount plus the additional gains will be paid out.
Downside investment works on the same basic principle, though in the reverse. In this case, you are predicting that the value of the crypto will be lower than the starting point as opposed to higher. So if the settlement price is lower than the linked price it is exercised, if it is equal to or greater than the yield price it is not exercised. Again, you are aiming for the price to not be exercised in order to earn yields without any changes being made to your original investment.
Let’s say that you’re looking to invest your BTC for a period of 14 days. 14 days is just the example, with other investment periods also offered. You can invest for just a few days or even for a few months. Keep in mind that the longer the investment period, the greater the risk will be. You decide to invest your BTC in ETH. The starting price of ETH is 100. You predict that the price won’t fall below 80, making 80 the linked price. You invest 200BTC and will be earning 50% APY on that investment.
Again, there are two different outcomes that can occur. Either the actual price of ETH is above or below your predicted level. Or the investment was or wasn’t exercised. If the price of ETH is above the linked price you collect the yield in ETH, plus your full initial deposit.
If the price is below your prediction your investment is converted into ETH at the actual market price, then sold back for BTC. Again, you still receive the yield.
If you’d like to get involved with dual investment at BigONE follow this simple step by step guide.
The major risks of dual investment are, of course, that dramatic market fluctuations could occur. Consider that you might invest, only for the price of your chosen crypto to rise or fall sharply. Since it is not possible to withdraw your investment until the contract expires a great deal of losses could be suffered in a short period of time.
Before investing in dual investments it is a good idea to contact a financial consultant first. An experienced financial consultant can expand on how dual investment works, and give a more detailed explanation.
Dual investment at BigONE is an excellent opportunity for those that are more familiar with financial markets and have a good idea of what they think will happen to the value of a crypto. It need not be said that dual investment is risky, though might potentially also be very lucrative. However, if you believe that a crypto will maintain value at least within a certain parameter, you can earn a lucrative amount in a relatively short period of time.
Another way to look at it is that dual investment is a great way to float funds while also earning payouts on that cash. Just be sure to keep in mind that investments of this kind aren’t intended for beginners. There are other ways to invest that aren’t as complicated, and don’t come with as much risk.
Dual investment is not considered a safe option. Given that the investment is based around predicting the value of a crypto over time, up to two weeks in advance or more, there is significant risk attached. Cryptos often experience dramatic shifts in value in very short periods of time, meaning that extensive losses could be suffered. There are other investment options that are safer than dual investment, even if the potential returns are less.
No, once crypto has been staked in dual investment it cannot be withdrawn until the subscription expires. This means that the money is locked in for the full duration, regardless of what is happening to the value of the chosen crypto. Subscriptions vary in length, up to two weeks and beyond, but there is never an option to withdraw the investment. For this reason it is very important to consider the investment carefully before making any commitments.
The linked price is the benchmark around which a dual investment is based. The idea is that payouts will be made based on how much the value of a crypto changes within that set parameter. Keep in mind that dual investments can be made based on upward or downward trends, referred to as upside or downside investment. However, either way, if you stake an investment and predict the wrong direction of value, gains or losses, you stand to walk away with less than when you started.
Investment periods vary, with BigONE offering a number of options. When selecting to enter a dual investment period pay special attention to how many days the subscription will last for. In general the time periods will either be a single week or two weeks. It goes without saying that two week investments are far riskier than single week periods. The longer the period of time, the greater the chance that the value of the chosen crypto will climb or fall more dramatically. If you’re new to dual investment, certainly start with a shorter period.
As to whether dual investment is worth the time and risk is a matter of opinion. The big appeal of dual investment is that, for the period of time, the returns are potentially very high. Though that does also depend on the amount staked upfront.
There are few investment options that offer payouts this large over such a short period, making the notion appealing. However, the level of risk involved is also significant, making it a poor investment option in the eyes of many financial experts.
There are less risky ways to invest, though these investments generally produce less returns, and are over far longer periods of time. It should be kept in mind that, for the most part, finance is generally considered a game of long-term investments. Long investments are much safer, even if they do produce comparably small returns. The difference is that a number of long term investments are guaranteed to produce returns.