Binance Dual Investment — Becoming the Landlord of the Crypto Market

2025-04-29 21:33

Read this article in 8 Minutes

Source: Binance

For many cryptocurrency industry investors, the concept of "Dual Investment" may be unfamiliar or somewhat vague. Recently, Binance held an AMA on Dual Investment to explain the mechanism behind it and provide some beginner tips.

The guests for this AMA were: DataDash trader and Binance Square creator ChainResearch, crypto options player and Weibo finance KOL Long Xin Yan, Binance Finance Vivian. The following is a highlight reel of the AMA:

What is Dual Investment?

Long Xin Yan: Dual Investment is a passive financial management tool that operates similarly to the earnest money mechanism in real estate transactions. For example, when you want to buy a second-hand house, you need to pay earnest money to lock in the price and prevent default at delivery. In Dual Investment:

· You act as the "seller" receiving a premium (similar to earnest money)

· You commit to buying/selling cryptocurrency in the future at an agreed price

· The trading platform acts as an intermediary to ensure contract enforcement

ChainResearch: This is actually a simplified version of option strategies in traditional financial markets:

· Buy the dip = Sell a put option (Buy with USDT)

· Sell the top = Sell a call option (Lock in the selling price)

Trading platforms package complex option contracts into products that even novices can operate

Vivian: Binance Finance users are quite familiar with this. We offer a variety of investment options, from principal-protected products (such as on-demand, fixed-term finance, similar to bank deposits) to high-risk, high-return products (such as Dual Investment). For users looking to optimize capital efficiency, Dual Investment is a tool worth considering.

It can be simply understood as: Dual Investment = Limit Order + Interest

· Traditional Limit Order: Place an order in the spot market (e.g., BTC spot price at $93,000, set to sell at $100,000), need to wait for the market to trigger, idle funds with no return.

· Dual Investment: Similarly set a target price (e.g., sell BTC at $100,000), but also earn premium interest (annualized around 3.65% - 100%+). Regardless of execution, you can earn returns.

Features of Binance Dual Investment

1. High Returns

· Basic annualized starting from 3.65%, with some short-term products reaching over 100%.

· Actual Yield Formula: Annualized Yield × (Holding Days/365). You can confirm how the holding days logic is calculated.

2. Flexible Term

· Short-term (Within 7 days): Suitable for capturing market fluctuations (e.g., BTC current price is 93,000, can set a sell order at 105,000).

· Long-term (6 months): Suitable for a conservative strategy, can set a higher target price (e.g., sell BTC at 130,000).

3. Simple Operation

· Supports mainstream currencies (BTC, ETH, etc.), with a minimum investment of 0.1U.

· No complex operations required, automatically executes after setting price and term.

Of course, dual-currency investment is not completely risk-free. It may also miss opportunities due to a significant price increase. Long Xin Yan, a respected figure in the industry, gave us an example: In December 2023, a typical case occurred where a user, in pursuit of a 300% annualized return, placed a BTC order at 95,000 and sold at 100,000 (only a 5% price difference). The price skyrocketed to 110,000 within a week. While earning the options premium, they missed out on a 15,000 per coin price increase.

Users Suitable for Dual-Currency Investment and Beginners

· Hodlers: Earn interest while holding coins to avoid idle funds.

· Swing Traders: Earn an options premium compared to a regular limit order.

· Conservative Investors: Choose long-term + wide price spreads (e.g., above 15%) to reduce execution risk.

For users who are just starting with dual-currency investment, it is essential to manage risks well, and the guests also provided some tips:

1. Start Small: Try with 0.001 BTC or 10U.

2. Choose a Secure Margin: Price spread> 10% (e.g., place a sell order for BTC at 107,000).

3. Term Selection: Preferably choose a 14-30 day product.

4. Hedge Preparation: Reserve 20% of funds to cope with extreme market conditions.

In addition, the guests provided the following answers to some common user questions. How to determine if the current market conditions are suitable for dual-currency investment? Long Xin Yan mentioned it depends mainly on two indicators: first is the volatility index> 80 (high premium during panic), second is the sideways cycle: BTC oscillating in a 5% range for more than 2 weeks. Some users are concerned about being traded at a price and want to remedy the situation. Lioryak Community, a respected figure, provided a solution: if you place a sell order for BTC dual-currency at 100,000, and the price breaks above 100,000, it will be executed. You can use a portion of the funds to open a perpetual contract long position and then buy back the BTC sold in the dual-currency.

When it comes to meme coins, one should be more cautious when investing. A good strategy is to aim for selling high rather than buying the dip (due to high liquidity risk). You can set a price difference of>30% (e.g., current price is $100, set sell order at $130).

To Investors

Lastly, I would like to remind all users that dual-coin investment is not a risk-free investment. Before making any investment decisions, thorough consideration is necessary. Dual-coin investment is a "time for space" game suitable for patient investors. Always keep 30% cash on hand to deal with black swan events along the investment journey.