Research on Robust Hedging Strategies in Downward Markets: A Comparative Study of High-Yield Cryptocurrency Products from Four Major Exchanges

Last week, the incident where Bybit was hacked for nearly $1.5 billion shocked the entire cryptocurrency industry. In response to the trust crisis, several major exchanges have successively increased the annualized interest rates of mainstream cryptocurrencies, especially ETH wealth management products, to boost user confidence in centralized exchanges.

At the same time, the cryptocurrency market is accelerating its downward trend. According to CoinGlass data, on February 25, the total liquidation amount across the network approached $1.15 billion. The volatile market significantly increases the trading risks for investors. Instead of entering the market rashly, it is better to seek more stable hedging strategies. The newly launched high-yield wealth management products have become a good choice. Especially for holders of mainstream cryptocurrencies and users holding USDT in wait-and-see mode, earning stable interest to hedge against cryptocurrency price losses while keeping their capital ready for the next bull market is clearly a wiser approach.

Recently, Binance, Huobi HTX, Bitget, and Gate have all launched new wealth management products. Each of the four exchanges has its own focus in terms of cryptocurrencies, annualized rates, and limits. Which one offers the most substantial interest rate increase and the most sincerity?

Comparison of New Wealth Management Products

Overall, Huobi HTX's 10% annualized BTC, ETH, and USDT 7-day fixed-term products can provide the highest estimated returns. Huobi HTX offers each user a subscription limit of 30,000 USDT for three different products, combining a high annualized rate with sufficient practicality. If a user fully subscribes to one of these 7-day fixed-term products, they will receive 57.5 USDT upon maturity.

In addition, Huobi HTX is the only exchange among the four to launch a high-yield BTC wealth management product, excelling in product diversity.

Bitget's ETH 14-day fixed-term product has the same interest rate of 10% as Huobi HTX, but the limit is only 5 ETH, which is inferior to Huobi HTX's 11 ETH; its 7-day fixed-term ETH product boasts an annualized rate as high as 50%. However, this product is limited to new users, and the subscription limit is only 0.4 ETH, resulting in an estimated return of only 10.5 USDT.

Gate also focuses on ETH products, with the annualized rates for the 3-day and 7-day fixed-term products raised to 5% and 6%, respectively. Although there is no limit, the annualized rates are lower compared to Huobi HTX and Bitget.

Binance has launched a limited-time activity for USDT, ETH, and SOL's flexible products, but compared to other exchanges, its ETH flexible product's interest rate is slightly less attractive, with a maximum of only 2.1%; the USDT flexible product has seen a significant increase in interest rates, adding a second tier compared to before the activity, with this part's yield at 4.15%. However, compared to other exchanges, Binance's USDT flexible product does not have an advantage in interest rates.

Comparison of Stablecoin Flexible Products

In addition to the aforementioned new wealth management products, the earning ability of USDT flexible products is also an important indicator of the attractiveness of wealth management services across major exchanges. Binance's USDT flexible product has been mentioned above and will not be repeated here; Bitget and Huobi HTX's USDT flexible products are relatively close in level, with the former having a better interest rate, offering an annualized rate of 12.9% within the tier (500 USDT) and 4.9% outside; the latter excels with a higher tier limit (1,000 USDT), providing an annualized rate of 10% for the portion within and 4% for the portion outside. Gate's current USDT flexible product has an annualized rate close to 4%, with an additional 10% annualized reward for the portion within 500 USDT.

Regarding other stablecoin flexible products, Binance's FDUSD and Bitget's USDC also have certain competitiveness; meanwhile, Huobi HTX is currently providing a subsidy of up to 20% annualized yield for the decentralized stablecoin USDD, making it a noteworthy stablecoin wealth management product.

Note: This article does not constitute investment advice.