As the cryptocurrency market has matured, investors are becoming aware of more sophisticated ways to profit from their crypto assets. While the “Buy and HODL” mantra remains popular among cryptocurrency holders, there are now many ways in which this passive strategy can be improved through opportunities to earn returns.
Crypto exchange Binance appears to be well aware of the demand for passive investments from crypto holders, and has created a full suite of investment products under its own Binance Earn banner. In this article, we will examine Binance Dual Investment, an example of a high-return product offered by the exchange.
Depending on your investment goals, Binance Dual Investment can perform two roles – if you are a holder of Bitcoin or Ethereum, you can hedge your Bitcoin price drop. If you have stablecoins, you will have a chance to get more BTC for your money, although at a later date. You will earn interest either way, but the overall profitability of your investment will still depend on market conditions – Binance Dual Investment is not considered a risk free investment.
Binance Dual Investment explained
There are two types of binary investments in Binance that you can invest in. You deposit BTC or ETH in Up and-Exercised products, while Exercised products accept stablecoin deposits. Let’s learn more about how these two products work.
up and exercise
In this type of Binance Dual Investment product, your deposit is converted into altcoin if the settlement price of the underlying asset is higher than the strike price on the delivery date. Currently, you can only deposit BTC and ETH into Up and-Exercised Products.
Let’s say you are using an Up-and-Exercised product with BTC as the underlying asset. If the BTC price is higher than the strike price on the delivery date, the BTC and accrued interest will be converted to BUSD.
If the product is not used, you will receive the BTC deposited plus interest.
down and exercise
On depreciated products, your deposit currency is converted to the alternate currency if the settlement price of the underlying asset is lower than the strike price on the delivery date. Currently, you can deposit either BUSD or USDT on the exercised products. If you exercise, your stablecoins will be converted to BTC or ETH (depending on the product you used).
For example, let’s say you deposited BUSD into a deteriorating product that uses ETH as the underlying asset. If the ETH price is lower than the strike price on the delivery date, BUSD, plus accrued interest, will be converted to ETH.
If the product is not used, you will receive your deposited stablecoins, plus interest.
important concepts
To understand how Binance Dual Investment works, we must first explain some basic terms associated with the product.
- the origin: the asset to which the reference price and the strike price refer. Currently, the primary assets offered by Binance for dual investment are BTC and ETH.
- Deposit currency: The asset you deposit in Binance Dual Investment. Currently, you can choose between BTC, BUSD, and USDT.
- Alt currency: The asset to which your deposit currency will be converted if the product is used.
- Reference price: the current price of the underlying asset.
- settlement price: The current price of the underlying asset at 08:00 UTC on the delivery date. This price is then compared to the strike price to determine if the product should be exercised.
- delivery date: The date on which the asset’s price is checked against the strike price. You cannot withdraw your money before the delivery date.
- strike price: The price level that determines whether or not the deposit currency will be converted. The strike price is checked against the settlement price to determine the outcome. The strike price is used as the conversion rate if the product is exercised.
- APY (Annual Return): Every Binance Dual Investment product has an associated APY. The APY for each product fluctuates over time, but your personal APY will be locked once you subscribe to the product. To avoid confusion and unrealistic expectations, we should note that this figure is annual.
The APY is usually higher the further away the delivery date is. The difference between the reference price and the strike price and how it relates to the type of product (exercised, exercised or exercised) also affects the APY.
Now, let’s check out some of the main advantages and disadvantages of Binance Dual Investment:
Pros of Binance Dual Investment
- Opportunity to earn high returns
- Provides hedging opportunities
- passive investment
Cons of Binance Dual Investment
- You cannot withdraw your assets during the term of your subscription, so you give up some liquidity
- If the price is significantly higher/lower than the strike price (depending on which product you have subscribed to), you are better off simply holding your assets and not using Binance Dual Investment
Why do you want to use Binance Dual Investment?
Binance Dual Investments is one of the options out there to earn a return on your crypto assets, be it BTC or stablecoins. Here are some examples of interesting use cases for the product.
Binance Dual Investment basically allows you to “fix” a more favorable price for an asset compared to the current price (but not necessarily the future price). Let’s say 1 BTC is currently trading at $10,000, and you own 1 BTC. If you want to hedge your portfolio against a bitcoin price drop, you can deposit 1 BTC into an Up-and-Exercised Binance investment product. Let’s say the strike price is $11,000. On the delivery date, if the price is $11,000 or less, you will receive 1 BTC + interest (paid in BTC), which means you will be better off than if you just held 1 BTC in your wallet.
If the price is $11,000 or more, you will receive $11,000 + interest. However, if the Bitcoin price was well above $11,000, you would be better off if you just kept 1 BTC in your wallet. If the entire bitcoin price goes up to $15,000, for example, you’ll still only receive $11,000 + interest. If you do nothing, you will get $15,000 worth of BTC in your wallet, instead of the $11,000 + interest you got from Binance Dual Investment.
If you own stablecoins and want to buy BTC, the low-exercise Binance Dual-Investment product can help you “lock” more BTC than you can buy right now. Here’s how it works:
Let’s say you own $10,000 and Bitcoin is currently trading at $10,000. If you use USDT to buy Bitcoin on the spot market, you will get 1 BTC. Now, let’s see what happens if you put your 10,000 USDT into a low-cost Binance Dual Investment product with an execution price of $9,000. If Bitcoin trades below the strike price on the delivery date, you will receive 1 BTC + interest (paid in BTC), which is more than the 1 BTC that you would have earned with 10,000 USDT before depositing it into Binance Dual Investment.
If the bitcoin price is above $9,000 on the date of delivery, you will receive $10,000 (or local equivalent) plus interest (paid in USDT).
How to use Binance Dual Investment?
Before you can use Binance Dual Investment, you will have to create an account with Binance.
After your account is ready, head over to the Funding section at the top of the Binance interface and select Earn.
Then select the “High Yield” option.
Scroll down to “Dual Investment”, and select “View More” to see all available Binance Dual Investment subscriptions.
Before the platform will allow you to use Binance Dual Investment, you will be required to take a test to show that you have sufficient knowledge of the product. We hope you learned enough about Binance Dual Investment in this article, but you can also check out this helpful guide on Binance Academy, as well as an explanation of the official Binance product. Make sure you fully understand the product before investing any money!
What are the risks of Binance Dual Investment?
Like any other income earning opportunity, Binance Dual Investment comes with a certain degree of risk. If you are depositing BTC into an Up and-Exercised Subscription, you will be in a losing position if the Bitcoin price significantly exceeds the execution price on the subscription delivery date. Conversely, if you are depositing a stablecoin into an exercised subscription, you will lose if the bitcoin price is much lower than the strike price on the delivery date.
Let’s illustrate this with a quick example. On September 20, I invested 1,000 USDT in the Binance Dual Investment product with the following parameters:
- Bitcoin reference price: $44,313
- APY: 5.17%
- Strike price: $43,000
- Delivery date: September 24, 2021
When you sign up for the product, you are presented with the two possible scenarios that could happen on the delivery date.
- If the bitcoin price is above the strike price ($43,000), you will recover your $1,000 investment, plus interest.
- If the bitcoin price falls below the strike price, you will receive 0.02326 BTC. This is roughly equivalent to the amount of BTC that can be bought with 1,000 USDT that you deposit, plus interest (calculated annually at 5.17% in our example).
Due to the massive crash in the cryptocurrency market, Bitcoin is now trading at $35,000, well below the $43,000 strike price.
According to the terms of your subscription, you receive 0.02326 BTC. However, since Bitcoin is now trading at $35,000, the BTC you received is only $814, less than your initial investment of $1,000 (for example, we assume 1 USDT always equals $1).
In this scenario, it was better to just hold $1000 than to put it in Binance Dual Investment. If you hold 1,000 USDT until the expiration date and then buy Bitcoin, you may get 0.02857 BTC for your money.
bottom line
Binance Dual Investment is a very unique product that serves as a useful addition to Binance’s suite of products that allows investors to earn a return on their crypto holdings. Binance Dual Investment can be counter-intuitive at first, but it offers useful hedging options and can help you implement more complex investment strategies and boost the return you earn on your crypto holdings. However, you need to keep in mind that Binance Dual Investment is a non-principal protected product, and you can incur losses if market conditions are not favorable for your position.
David is a cryptocurrency enthusiast and an expert in personal finance. He has authored several publications for different platforms. He loves to explore new things, and this is how he discovered blockchain in the first place.
binance dual investment test questions
binance dual investment test bank
binance dual investment test ا
binance dual investment test آ
binance dual investment test ب
binance dual investment test پ
binance dual investment test ت
binance dual investment test ث
binance dual investment test ج
binance dual investment test چ
binance dual investment test ح
binance dual investment test خ
binance dual investment test د
binance dual investment test ذ
binance dual investment test ر
binance dual investment test ز
binance dual investment test ژ
binance dual investment test س
binance dual investment test ش
binance dual investment test ص
binance dual investment test ض
binance dual investment test ط
binance dual investment test ظ
binance dual investment test ع
binance dual investment test غ
binance dual investment test ف
binance dual investment test ق
binance dual investment test ک
binance dual investment test گ
binance dual investment test ل
binance dual investment test م
binance dual investment test ن
binance dual investment test و
binance dual investment test ه
binance dual investment test ی
binance dual investment test a
binance dual investment test answers
binance dual investment test application
binance dual investment test arizona
binance dual investment test answer
binance dual investment test account
binance dual investment test action
binance dual investment test analysis
binance dual investment test amazon
binance dual investment test access
binance dual investment test app
binance dual investment test act
binance dual investment test appointment
binance dual investment test accounting
binance dual investment test agreement
binance dual investment test approved
binance dual investment test australia
binance dual investment test az
binance dual investment test available
binance dual investment test accuracy
binance dual investment test alberta
binance dual investment test b
binance dual investment test c
binance dual investment test california
binance dual investment test calculator
binance dual investment test cost
binance dual investment test chart
binance dual investment test coupon
binance dual investment test canada
binance dual investment test colorado
binance dual investment test code
binance dual investment test center
binance dual investment test codes
binance dual investment test club
binance dual investment test coronavirus
binance dual investment test course
binance dual investment test criteria
binance dual investment test company
binance dual investment test centre
binance dual investment test companies
binance dual investment test card
binance dual investment test coverage
binance dual investment test coupons
binance dual investment test d
binance dual investment test dates
binance dual investment test date
binance dual investment test definition
binance dual investment test de
binance dual investment test discount
binance dual investment test download
binance dual investment test diabetes
binance dual investment test data
binance dual investment test denver
binance dual investment test decision
binance dual investment test dental
binance dual investment test diet
binance dual investment test database
binance dual investment test dogs
binance dual investment test details
binance dual investment test draw
binance dual investment test design
binance dual investment test direct
binance dual investment test done
binance dual investment test day
binance dual investment test e
binance dual investment test explained
binance dual investment test example
binance dual investment test equipment
binance dual investment test examples
binance dual investment test english
binance dual investment test exam
binance dual investment test en
binance dual investment test error
binance dual investment test eligibility
binance dual investment test excel
binance dual investment test entry
binance dual investment test explanation
binance dual investment test exercises
binance dual investment test episode
binance dual investment test extension
binance dual investment test episode 1
binance dual investment test extra
binance dual investment test exams
binance dual investment test event
binance dual investment test evidence
binance dual investment test f
binance dual investment test form
binance dual investment test free
binance dual investment test fee
binance dual investment test for dummies
binance dual investment test for seniors
binance dual investment test formula
binance dual investment test for sale
binance dual investment test fees
binance dual investment test for beginners
binance dual investment test for children
binance dual investment test florida
binance dual investment test for 2020
binance dual investment test for women
binance dual investment test for real estate
binance dual investment test for men
binance dual investment test full
binance dual investment test for 2019
binance dual investment test for college
binance dual investment test forms
binance dual investment test for kids
binance dual investment test g
binance dual investment test guide
binance dual investment test guidelines
binance dual investment test grade
binance dual investment test generator
binance dual investment test game
binance dual investment test georgia
binance dual investment test group
binance dual investment test glasses
binance dual investment test gold
binance dual investment test general
binance dual investment test golf
binance dual investment test good
binance dual investment test guides
binance dual investment test government
binance dual investment test games
binance dual investment test grades
binance dual investment test ga
binance dual investment test ground
binance dual investment test global
binance dual investment test grand
binance dual investment test h
binance dual investment test history
binance dual investment test high
binance dual investment test how to
binance dual investment test hawaii
binance dual investment test horses
binance dual investment test hours
binance dual investment test handbook
binance dual investment test high school
binance dual investment test hypothesis
binance dual investment test highest
binance dual investment test hub
binance dual investment test head
binance dual investment test hardware
binance dual investment test horse
binance dual investment test help
binance dual investment test hong kong
binance dual investment test heads
binance dual investment test human
binance dual investment test holder
binance dual investment test houston tx
binance dual investment test i
binance dual investment test instructions
binance dual investment test illinois
binance dual investment test in india
binance dual investment test information
binance dual investment test in the philippines
binance dual investment test in canada
binance dual investment test info
binance dual investment test interpretation
binance dual investment test in california
binance dual investment test ii
binance dual investment test il
binance dual investment test irs
binance dual investment test in usa
binance dual investment test instant
binance dual investment test ideas
binance dual investment test indiana
binance dual investment test in texas
binance dual investment test ireland
binance dual investment test india
binance dual investment test in singapore
binance dual investment test j
binance dual investment test journal
binance dual investment test joint
binance dual investment test june
binance dual investment test january
binance dual investment test jobs
binance dual investment test july
binance dual investment test just
binance dual investment test japan
binance dual investment test junior
binance dual investment test jar
binance dual investment test judge
binance dual investment test james
binance dual investment test joliet
binance dual investment test java
binance dual investment test jewelry
binance dual investment test junction
binance dual investment test johnson city
binance dual investment test jig
binance dual investment test jesus
binance dual investment test jan
binance dual investment test k
binance dual investment test kit
binance dual investment test kits
binance dual investment test kentucky
binance dual investment test key
binance dual investment test kansas
binance dual investment test knee
binance dual investment test kansas city
binance dual investment test knowledge
binance dual investment test knife
binance dual investment test knives
binance dual investment test kidneys
binance dual investment test kitchen
binance dual investment test king
binance dual investment test keep
binance dual investment test know
binance dual investment test l
binance dual investment test login
binance dual investment test locations
binance dual investment test los angeles
binance dual investment test log
binance dual investment test las vegas
binance dual investment test law
binance dual investment test levels
binance dual investment test location
binance dual investment test level
binance dual investment test list
binance dual investment test labs
binance dual investment test liver
binance dual investment test louisiana
binance dual investment test low
binance dual investment test la
binance dual investment test limit
binance dual investment test life insurance
binance dual investment test lab
binance dual investment test life
binance dual investment test liquid
binance dual investment test m
binance dual investment test method
binance dual investment test management
binance dual investment test meaning
binance dual investment test manual
binance dual investment test machine
binance dual investment test medical
binance dual investment test massachusetts
binance dual investment test methods
binance dual investment test mark
binance dual investment test maker
binance dual investment test michigan
binance dual investment test map
binance dual investment test menu
binance dual investment test medicare
binance dual investment test maryland
binance dual investment test material
binance dual investment test match
binance dual investment test marks
binance dual investment test materials
binance dual investment test md
binance dual investment test n
binance dual investment test nj
binance dual investment test new york
binance dual investment test near me
binance dual investment test nyc
binance dual investment test ny
binance dual investment test new jersey
binance dual investment test numbers
binance dual investment test news
binance dual investment test nursing
binance dual investment test normal
binance dual investment test nutrition
binance dual investment test nevada
binance dual investment test national
binance dual investment test network
binance dual investment test nc
binance dual investment test natural
binance dual investment test number
binance dual investment test net
binance dual investment test non
binance dual investment test negative
binance dual investment test o
binance dual investment test online
binance dual investment test options
binance dual investment test of life
binance dual investment test of balance
binance dual investment test ohio
binance dual investment test order
binance dual investment test of performance
binance dual investment test offer
binance dual investment test ontario
binance dual investment test of history
binance dual investment test of money
binance dual investment test of india
binance dual investment test of ethics
binance dual investment test oregon
binance dual investment test of class
binance dual investment test option
binance dual investment test of knowledge
binance dual investment test of good
binance dual investment test open
binance dual investment test of asset
binance dual investment test p
binance dual investment test procedure
binance dual investment test prep
binance dual investment test pdf
binance dual investment test practice
binance dual investment test pa
binance dual investment test preparation
binance dual investment test price
binance dual investment test plus
binance dual investment test program
binance dual investment test plan
binance dual investment test papers
binance dual investment test points
binance dual investment test point
binance dual investment test positive
binance dual investment test philippines
binance dual investment test printable
binance dual investment test pattern
binance dual investment test prices
binance dual investment test procedures
binance dual investment test portal
binance dual investment test q
binance dual investment test r
binance dual investment test results
binance dual investment test reviews
binance dual investment test review
binance dual investment test rules
binance dual investment test report
binance dual investment test requirements
binance dual investment test result
binance dual investment test registration
binance dual investment test rates
binance dual investment test release
binance dual investment test ratio
binance dual investment test register
binance dual investment test rate
binance dual investment test request
binance dual investment test rule
binance dual investment test real estate
binance dual investment test required
binance dual investment test recommendations
binance dual investment test reference
binance dual investment test rewards
binance dual investment test s
binance dual investment test series
binance dual investment test score
binance dual investment test schedule
binance dual investment test scam
binance dual investment test scores
binance dual investment test strips
binance dual investment test set
binance dual investment test system
binance dual investment test sample
binance dual investment test study
binance dual investment test singapore
binance dual investment test services
binance dual investment test site
binance dual investment test summary
binance dual investment test solutions
binance dual investment test scoring
binance dual investment test software
binance dual investment test solution
binance dual investment test sites
binance dual investment test strategy
binance dual investment test t
binance dual investment test texas
binance dual investment test template
binance dual investment test time
binance dual investment test tool
binance dual investment test table
binance dual investment test tickets
binance dual investment test tx
binance dual investment test tips
binance dual investment test treatment
binance dual investment test today
binance dual investment test times
binance dual investment test tournament
binance dual investment test technique
binance dual investment test training
binance dual investment test tracker
binance dual investment test trading
binance dual investment test terms
binance dual investment test trial
binance dual investment test take
binance dual investment test tables
binance dual investment test u
binance dual investment test usa
binance dual investment test uk
binance dual investment test update
binance dual investment test utah
binance dual investment test unit
binance dual investment test us
binance dual investment test units
binance dual investment test united states
binance dual investment test ultimate
binance dual investment test used
binance dual investment test used to
binance dual investment test ultra
binance dual investment test universal
binance dual investment test urine test
binance dual investment test university
binance dual investment test ultrasound
binance dual investment test un
binance dual investment test universe
binance dual investment test user
binance dual investment test utility
binance dual investment test v
binance dual investment test vs
binance dual investment test version
binance dual investment test value
binance dual investment test values
binance dual investment test valve
binance dual investment test video
binance dual investment test videos
binance dual investment test virginia
binance dual investment test visa
binance dual investment test verification
binance dual investment test vehicle
binance dual investment test valves
binance dual investment test volume
binance dual investment test va
binance dual investment test vision
binance dual investment test virtual
binance dual investment test view
binance dual investment test voucher
binance dual investment test variable
binance dual investment test vaccine
binance dual investment test w
binance dual investment test wikipedia
binance dual investment test walmart
binance dual investment test winners
binance dual investment test wisconsin
binance dual investment test website
binance dual investment test washington state
binance dual investment test withdrawal
binance dual investment test worksheet
binance dual investment test without
binance dual investment test walgreens
binance dual investment test wiki
binance dual investment test winner
binance dual investment test with medicare
binance dual investment test wow
binance dual investment test with high
binance dual investment test word
binance dual investment test winning
binance dual investment test watch
binance dual investment test walkthrough
binance dual investment test waiver
binance dual investment test x
binance dual investment test xl
binance dual investment test x-ray
binance dual investment test xbox one
binance dual investment test xbox
binance dual investment test xfinity
binance dual investment test xt
binance dual investment test xr
binance dual investment test xbox 360
binance dual investment test xd
binance dual investment test x5
binance dual investment test y
binance dual investment test youtube
binance dual investment test yahoo
binance dual investment test your credit
binance dual investment test year
binance dual investment test your money
binance dual investment test your balance
binance dual investment test your value
binance dual investment test yarn
binance dual investment test years
binance dual investment test yeast
binance dual investment test your body
binance dual investment test you have
binance dual investment test yesterday
binance dual investment test your portfolio
binance dual investment test york
binance dual investment test your bond
binance dual investment test your level
binance dual investment test your college
binance dual investment test your time
binance dual investment test your home
binance dual investment test z
binance dual investment test zero
binance dual investment test zone
binance dual investment test za
binance dual investment test zip
binance dual investment test zoom
binance dual investment test zones
binance dual investment test zombies
binance dual investment test zdarma
binance dual investment test zipper
binance dual investment test &
binance dual investment test & analysis
binance dual investment test & performance
binance dual investment test & report
binance dual investment test & management
binance dual investment test & review
binance dual investment test & development
binance dual investment test & training
binance dual investment test & calculator
binance dual investment test & application
binance dual investment test & value
binance dual investment test & assessment
binance dual investment test & score
binance dual investment test & market
binance dual investment test & control
binance dual investment test & check
binance dual investment test & strategy
binance dual investment test & safety
binance dual investment test & high
binance dual investment test & ratio
binance dual investment test & results
binance dual investment test а
binance dual investment test б
binance dual investment test в
binance dual investment test г
binance dual investment test д
binance dual investment test е
binance dual investment test ё
binance dual investment test ж
binance dual investment test з
binance dual investment test и
binance dual investment test й
binance dual investment test к
binance dual investment test л
binance dual investment test м
binance dual investment test н
binance dual investment test о
binance dual investment test п
binance dual investment test р
binance dual investment test с
binance dual investment test т
binance dual investment test у
binance dual investment test ф
binance dual investment test х
binance dual investment test ц
binance dual investment test ч
binance dual investment test ш
binance dual investment test щ
binance dual investment test ъ
binance dual investment test ы
binance dual investment test ь
binance dual investment test э
binance dual investment test ю
binance dual investment test я
