As the title suggests, this article is a strategy recommendation to help you achieve better income growth and investment product selection, helping you to have the best of both worlds.
A few days ago, I wrote two articles about #Binance financial products - dual currency investment and interval income treasure. From data income comparison to strategy recommendation, they have received good market response.
At least in the Chinese area, it provides a relatively complete guide, which not only helps readers to establish a basic understanding of the product, but also allows them to see the product advantages more clearly.
I even forwarded the original article to Twitter and won a like from Binance co-founder He Yi (Yijie)~
The two income products I recommend are based on two dates. Because I am a short-term trader myself, I understand that long-term market fluctuations are full of uncertainty. At least from my perspective, it is difficult for me to judge the specific points in the next six months, a year, or even several years.
However, for products with two dates, such as weekend market conditions and market conditions after a unilateral trend, it is still difficult to grasp them.
As we are about to enter the weekend, you can try to learn about these two income products starting this week. In this article, I will tell you how to flexibly apply these two products from the perspective of short-term equity?
1. Product differences and similarities
The common feature of Dual Currency Investment and Interval Income Treasure is that they are both digital asset financial products that can help users obtain higher returns in the digital asset market. However, their specific features and advantages and disadvantages are different.
From the underlying logic, the two products are quite different: 1️⃣ One is a market strategy tool, and the other is an option product;
Although they have similar choices in the short-term time dimension, 2️⃣the logic and settlement methods used are also different.
For example, Interval Income Treasure uses the local currency you invested as the settlement. You will get the same settlement as your investment. Dual Currency Investment has two possibilities: settlement in cash if the exercise target is reached, and settlement in the local currency of the purchased product if the exercise target is not reached (buying products will be settled in BTC);
3️⃣ In terms of time, the optional period for [Interval Income Treasure] is shorter, no more than one month, while [Dual Currency Investment] can even be selected across the year;
4️⃣ In terms of industry competition, there are not many homogeneous products in the interval income treasure market. At least among the trading platforms in the same echelon, only one newer platform has similar products; while dual currency investment has a high degree of homogeneity, and almost every platform has this product
5⃣️Among the product categories, the optional products of Interval Treasure are far less abundant than those of Dual Currency Investment, so the flexibility is not as rich as that of Dual Currency Investment.
The above five dimensions are where the two differ. However, even though they have many differences, we can still incorporate them into our investment system as complementary investment portfolios.
2. Comparison of return and risk
Using previous data and the latest data, I compared the short-term returns of the two products and found that:
In the 2-day product, dual-currency investment will have better returns than interval income treasure;
Among the 7-day options, the Interval Income Treasure has an outstanding performance;
But is it enough to just calculate the return? Not really. Since the two products have different usage logics, I only selected the highest return in the latest cycle without comprehensively evaluating the risks.
Based on my understanding of the product and the objective volatility (the risk here is assumed to be in the scenario I gave earlier. If you don’t understand, you can read my article earlier), I made a risk comparison chart and the result is:
The overall risk of the 2-day product of the Interval Treasure is the lowest, even though its objective return is the lowest; on the contrary, its 7-day return is the highest, but at the same time the risk is also greatly increased;
The overall performance of dual-currency investment is relatively moderate compared to interval treasure, and even the cost-effectiveness of 7 days is relatively low. However, as the cycle lengthens, the cost-effectiveness of dual-currency investment in large cycle configuration will be much higher than that of short cycle (stability);
3. Crowd portrait
I threw a bunch of data above, maybe it sounds a bit confusing to you, so let me summarize the above points:
Interval Income Treasure is suitable for short-term (especially weekend 2 days) interval arbitrage, and it will better amplify the winning rate with the support of data;
The short-term risk of dual-currency investment is not small, but it can be used as an option risk hedging tool for spot or contract players or configured for players with currency-based thinking in each cycle.
That is to say, from a short-term perspective, the 2-day interval treasure is suitable for most people, while the dual-currency investment is more suitable for holders with more "belief/consensus" or professional traders with market analysis capabilities, and the configuration is more flexible;
4.Combination of two products
Because I have selected products from two dates as examples, it may be a good choice to use them together on weekends. The specific operations are as follows (this does not constitute investment advice, it only stays at the theoretical level, please keep #DYOR )
As Friday approaches Saturday, choose a Bitcoin product with a fluctuation of less than 1,000 points, and you will have an 87% chance of making a profit.
At the same time, buy a dual-currency investment product with a buy low or sell high, and the preset range is exactly between 1000 points and 2000 points to hedge the volatility risk of the interval treasure product.
In this scenario, if the interval treasure does not exceed the range, you will get double interest of cash + Bitcoin; if it exceeds the range, you can use the interest of dual currency investment to hedge the loss caused by the volatility risk of interval treasure.
Although the combination of the two is still difficult to resist extreme market fluctuations, investment itself is a game with risk. The risk hedging product constructed by the combination of the two products will be a more stable income tool (only represents the view of the weekend of 2 days)
👁️To sum up: the main feature of the Interval Income Treasure is short-term investment, while the Dual Currency Investment is more flexible, professional and cross-cycle. Investors can match these two products with each other in different cycles, and in the 2-date selection, combining them will be able to build a more stable investment tool!
Note: You can find these two tools on Binance’s financial management page or search box