The Snowball in structured finance is a distinctive offering that allows investors to gain escalating returns once the price of the underlying asset hits certain preset levels. This dynamic tool offers a chance to actively participate in financial markets. By utilizing crypto options, it crafts a solution that caters to investors seeking both growth potential and risk management in a single entity.

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How does Bitget Snowball work?

Bitget Snowball is a type of structured financial product with principal protection. This means that your initial investment is risk-free because you are guaranteed to get back the amount you initially put in, irrespective of how the investment performs. It's designed to capitalize on potential market fluctuations, whether they are upticks (bull markets) or downturns (bear markets), presenting a lot of profit opportunities.

The profitability can be substantial during favorable conditions, akin to when 'stars are aligned'. This suggests that under ideal market conditions, there is the potential for significant returns on investment. So, essentially, with Bitget Snowball, you have the dual benefit of guaranteed principal protection on one side and prospects for high returns on the other. Furthermore, given its structured nature, Bitget Snowball is crafted in such a way that it can strategically harness both positive and negative market movements, thus offering diverse opportunities for returns.

Snowball offers two types of products: Bullish and Bearish. Each product has its own Knock-in and Knock-out prices. Whenever the underlying asset hits the Knock-in price, your APR will increase by a certain amount, resulting in bigger earnings for you.

Take our Bullish_USDT/BTC_Snowball product for example. This product has a 3% base APR and a maturity of 7 days, consisting of 7 24-hour Observation Periods. Each Observation Period starts at 16:00 (UTC+8), with its own Knock-in and Knock-out prices.

During each Observation Period, if BTC’s price reaches the Knock-in price, a Knock-in event will be recorded, your APR will increase by 3%, and no more Knock-in or Knock-out events will be recorded for this Observation Period.

If BTC’s price drops below the Knock-out price, a Knock-out event will be recorded, and the product will be terminated prematurely. Otherwise, the product will mature after 7 days. You can also redeem your principal early and get your liquidity back before maturity or termination at the risk of less earnings.

Your total APR at settlement will be calculated as follows:

(No. of Knock-in Events Recorded Before Termination or Redemption) * Base APR

and you will earn interest on your principal for the number of days until redemption, termination, or maturity.

In this product’s case:

If 4 Knock-in events and no Knock-out event are recorded after 7 days, your earnings will look like this:

Day                            Event                   APR
1                                    /                         0%
2                            Knock-in                   3%
3                            Knock-in                   6%
4                                   /                          6%
5                            Knock-in                   9%
6                            Knock-in                  12%
7                          /(Maturity)                  12%

Your total APR will be:

4 * 3% = 12%

Your interest payable for 10,000 USDT in principal will be:

10,000 * 12% * 7/365 = 23.0137 USDT

Our Bearish products - Bearish_USDT/BTC_Snowball product, for example - work just the same but their Knock-in prices are lower than Knock-out prices. Say it comes with a base APR of 3.5%, then:

If BTC’s price reaches the Knock-in prices 5 times and 1 Knock-out event is recorded on Day 7, and Investor A waits until Day 7 while Investor B redeemed their principal on Day 3, their earnings will look like this:

 Day                Event                                            A’s APR           B’s APR
1                   Knock-in                                           4%                3.50%
2                   Knock-in                                           7%                  7%
3                   Knock-in (Early Redemption)               10.5%          10.50%
4                      /                                                   10.5%               0
5                   Knock-in                                           14%                  0
6                   Knock-in                                           17.5%               0
7                   Knock-out                                         17.5%               0

Their total APR will be:

5 * 3.5% = 17.5% (A)

and

3 * 3.5% = 10.5% (B), respectively.

Their interests payable for 10,000 USDT in principal will be:

10,000 * 17.5% * 7/365 = 33.5616 USDT (A)

and 

10,000 * 10.5% * 3/365 = 8.6301 USDT (B), respectively.

 

Closing thoughts

Just like any other financial asset or instrument out there, Bitget Snowball does come with its own set of potential benefits and potential pitfalls. This is inherent in the unpredictable nature of the world of finance, where gains and losses coexist in a delicate balance. Indeed, the potential promise of rewards is mirrored by the reality of accompanying risks; the duality is, in fact, a basic tenet of the financial ecosystem. Hence, while Bitget Snowball has the enticing allure of possible financial profits, it also presents its share of risks that any prudent investor must be aware of.

However, one of the intriguing aspects of Bitget Snowball is that it carries what's known as principal protection. This interesting feature remarkably lowers the level of risk, makes it substantially less precarious compared to a wide array of other financial products available in the market. What this means is that regardless of the market volatility or fluctuations, there's an assurance of getting your principal investment back. It's the kind of safety net that stands firm no matter what, shielding your initial investment from any possible adverse effects of an erratic market. Maximize your cryptocurrency investments with Bitget's advanced cryptocurrency calculator, a reliable tool that lets you effortlessly compute potential profits, manage your portfolio, and make informed decisions quickly!

Moreover, one of the exciting attributes of Bitget Snowball is its potential for an increase in the Annual Percentage Rate, often abbreviated as APR. This growth potential becomes particularly enticing precisely in those times when the underlying price of the product is in a state of relentless fluctuation. The term 'oscillating' is often used to describe these ceaseless, back and forth market movements. It's this regular oscillation that opens up possibilities for substantial growth, thereby making Bitget Snowball an asset worth considering for many investors looking to leverage the dynamics of a tumultuous market for potential gains.