We review Binance dual investment with a calculation example.
What is Binance dual investment and how can you earn yields over 100% APR?
In addition, you can earn in both a bear market and a bull market since you can both agree to buy crypto or sell crypto in the near-term future. However, usually, dual investment is most profitable during flat market conditions.
We explain everything to you in this article.
What is Binance dual investment?
Binance Dual Investment is a high-interest yield product.
Here, you can agree to buy or sell cryptocurrency at your desired price and date in the future while earning a high-interest yield no matter which direction the market goes.
If you hold stablecoins, you can agree to buy a cryptocurrency at a certain price (lower than the current market price) at a certain settlement date in the future. If the cryptocurrency price is at, or below the agreed price on the settlement date, you will get the agreed cryptocurrency + the interest rate on your account. If the cryptocurrency price is above the agreed price, you hold your stablecoins and the interest rate.
If you hold cryptocurrencies, you agree to sell your cryptocurrencies to a certain price (higher than the market price) at a certain settlement date in the future. If the cryptocurrency price is at, or above the agree price, you will receive stablecoins + the earned interest on your account. If the cryptocurrency price is below the agreed price, you hold your crypto + the earned interest rate.
When should I use Binance dual investment?
If you believe the markets will be flat for a while it´s hard to invest since you will not earn by going go long or going short on Binance.
However, the dual investment on Binance is perfect if the market is not moving since you will hold your coins but earn a very high-interest rate on them outperforming any other APY you can find on the market.
Binance Dual Investment Risks
As for any investment product, certain risks are associated with Binance dual investment contracts.
Binance dual investment contracts are similar to short-term crypto options with a settlement date in the near future (days to weeks).
- If you hold stablecoins and agree to buy cryptocurrency at a certain price on a specific date in the future, the risk is that the cryptocurrency is worth less than the settlement price on the settlement date.
- If you hold cryptocurrency and agree to sell at a specific time at a certain price in the future, the risk is that the cryptocurrency is worth more than the agreed price on the settlement date.
Still, you will get the agreed interest rate paid in any scenario.
Binance Dual Investment Yield
How can Binance dual investment pay such high yields in interest return APR?
Binance dual investment is a crypto-up option trading agreement between you and a counterparty.
You give the counterparty the right to buy or sell crypto at a specific time in the future.
The counterpart is prepared to pay you a premie to sign this deal. Therefore, if you think the premie covers the risk, the agreement is preferable.
Binance Dual Investment Step-by-step
Here is our step-by-step guide for Binance dual investment.
- Sign up with Binance
- Login to Binance and go to Binance Earn
- Chose Dual Investment
- Choose an asset (see screenshot below in beginner mode). We selected Bitcoin BTC
- Decide to Sell High or Buy Low. We decided to sell BTC
- Enter target price and settlement date by clicking the pen symbol. We want to sell Bitcoin BTC if the price is at or higher than 19.500 the 2022/09/30
- Enter Subscription Amount (see the screenshot below)
- Check the possible scenarios click that you have understood the possible outcomes. See outcome scenarios 1 and 2 in the screenshots below.
- Confirm and Subscribe
Binance Dual Investment Beginner Mode
There is a beginner mode for Binance dual investment. If you use the product for the first time, you might want to opt-in to use the beginner mode. The beginner bode guides you through the investment process with a step-by-step guide.
Auto-compound Binance Dual Investment
Binance dual investment auto-compound means that you automatically can re-subscribe to a new position on the settlement day. Auto-compound is not available in the beginner mode.
- Ethereum ETH settles every Tuesday and Friday.
- All other assets settle every Friday.
Basic Plan auto-compound – Set a new target price and compound until the target is reached
Advanced plan auto-compound – Here, you can continue to auto-compound in the same direction if Target Price is not reached.
IN addition, you can Auto-Compound in a different direction if Target Price is reached.
Binance Dual Investment Strategies
There are different strategies to approach the Binance dual investment product.
First, you need to decide if your strategy is to acquire as many crypto coins as possible or as many stabelcoins as possible.
If you hold stablecoins and your strategy is to acquire more stablecoins, the Binance dual investment product is perfect in a neutral and bull market.
If you hold cryptocurrencies and want to acquire more cryptocoins over time, the Binance dual investment product is perfect in a neutral and a bear market.
Read more about the top 6 dual investment strategies from the Binance academy.
Binance Dual Investment VS Crypto Option Trading
Binance dual investment is a simple version of crypto options trading.
Also, the settlement date is shorter than average crypto options trading, where you can find options with a settlement date of 9 months in the future.
Summary: Binance dual investment is a simple form of crypto options trading with short time frames. Crypto technical analysis might be applicable for such investments. Also, crypto hedge trading can be an alternative.
Binance Dual Investment Video Tutorial from Binance
Binance Dual Investment Pros and Cons
- You can earn high-interest rates. Especially if the market is not moving in any direction
- Beginner mode is straightforward to use
- Only available in certain jurisdictions, and this is not transparent
- There is a quiz before you are allowed to enter this product
- There are risks involved that can be hard to evaluate for a beginner
- It’s complicated to calculate long-term losses or gains since it can be profitable in both directions