Investing in cryptocurrencies can be a daunting task, especially for those who are just starting out. There are so many options and indicators to keep an eye on that it can be hard to know where to put your money for the best return.
If you trade cryptocurrencies, your goal is probably to buy low and sell high. But the fear of losing your hard-earned money is omnipresent. As it’s not always that easy to make good decisions, and it is quite impossible to time the market. What you may consider the bottom could still be thousands of dollars far from the bottom.
However, if you are familiar with Binance, you might have noticed Dual investment under the earn section of the interface.
Binance dual investment is an exciting solution that embraces the whole “buy low, sell high” concept differently. It allows you to make money regardless of how the market is doing right now, which makes it a great addition to spot trading or other earning options.
Although this product is quite complex and might not be suitable for beginners, this article will give you the needed foundation to understand what it is and how Binance dual investment works.
Also, near the end of this article, we’ll give you the correct answers to two Binance quizzes. One is a knowledge quiz that you have to pass to be able to use this product. And the second one is a Free BTC Subscription Quiz.
What is Binance Dual Investment
This product is called “dual investment” because you can take two different approaches that can trade two different coins based on the market performance.
Buy Low Dual Investment allows you to buy crypto at a lower price in the future while also earning interest.
Alternatively, Sell High Dual Investment can be used to sell cryptocurrency at a higher price in the future while also earning interest.
However, it’s not like limit trading since there are four possible outcomes based on the market performance.
If you use the Buy Low Dual Investment:
- If the price hit your desired target price, your crypto will be “sold” at that price while earning interest.
For instance, if you sign up with BUSD against BTC, and BTC dips under your desired value, your BUSD is sold for BTC, and you will get an additional percentage interest. - If the price is not fulfilled, you will just earn interest.
If you use the Sell High Dual Investment
- If the asset’s price rises over the target price, your investment will be converted to an alternative cryptocurrency.
For instance, If you sign up with BTC against BUSD and the price of BTC climbs over your preferred value, your BTC will be sold for that stablecoin. - If the price does not exceed the target price, you will still get the APR yield on your deposited cryptocurrency.
The coin in which the interest will be paid depends on whether the order is fulfilled or not.
How to Use Binance Dual Investment
You Decided to Use Buy Low Dual Investment
If you want to use the buy low investment, you can choose from a number of settlements. You are not making creating the product yourself but choosing from a list.
The offered APR depends mainly on the target price. The lower the targeted price is, the lower is the APR. That’s because you’ll always be buying for the target price at the settlement date if the threshold is surpassed.
That means that even if the price goes down by 10%, but you are subscribed to a dual investment with a target price that is -2%, you’ll be buying for -10%.
So as the higher price poses a higher risk, it gives a higher APR.
Let’s say you chose USDT/BTC pair, investing $100 worth of USDT with a target price of $20,000 and 50% APR. The current Bitcoin price is $22,000.
| Buy Low Dual Investment | Data |
|---|---|
| Subscription amount of USDT | $100 |
| Current price of BTC | $22,000 |
| Target price of BTC | $20,000 |
| APR | 50% |
| Subscription Date | 01/01/2022 |
| Settlement Date | 08/01/2022 |
| Subscription Period | 7 days |
There are three scenarios that could possibly happen, influencing whether or not you make money.
Scenario 1: Bitcoin Stays Above your Target Price
If the Bitcoin price doesn’t go under your target price, the trade won’t be executed. In that case, you’ll only earn interest, that’s set to 50% APR.
In this specific case, you’ll get back your initial investment of $100 in USD + $0.958 in interest.
That’s because the annual percentage yield is 50%.
To get a daily yield, you’ll have to divide the number by 365.
50/365 = 0.136 daily percentage yield
Now, multiply that by seven since you subscribed for seven days. And that equals a return of 0.958% over the course of your 7-day subscription period.
So you will end up with $100.96 worth of USDT.
Scenario 2: Bitcoin is Slightly Below your Target Price
If the price of your targeted coin is bellow your targeted price at the settlement date, the trade is executed.
In this case, you’ll receive BTC back instead of USDT.
The amount is calculated by dividing your target price by your investment.
100/20,000 = 0.005 BTC
You’ll also get around 0.0000005 BTC from interest. However, depending on how much the price dropped bellow your target price, you might be at a loss in terms of FIAT currency.
Scenario 3: Bitcoin is Hit by a Major Price Drop
In the case of the BTC price dropping far more than your percentage yield, you can possibly lose a big chunk of money.
As you can’t end the subscription period and the buy low will be settled at your target price. Meaning that even if the price drops to $15,000, you’ll still be buying at $20,000.
You Decided to Use Sell High Dual Investment
You chose the other way around, and you want to sell your BTC for a higher price. Once again, you can choose from a long list of settlements.
Now let’s say that this time, you decided to subscribe to BTC/USDT with 1BTC invested and a target price of $22,000. Bitcoin is now priced at $20,000, and you are offered 50% APR.
| Sell High Dual Investment | Data |
|---|---|
| Subscription amount of BTC | 1 BTC |
| Current price of BTC | $20,000 |
| Target price of BTC | $22,000 |
| APR | 50% |
| Subscription Date | 01/01/2022 |
| Settlement Date | 08/01/2022 |
| Subscription Period | 7 days |
Also, this time, there are three main scenarios that might occur.
Scenario 1: Bitcoin Stays Below your Target Price
If the price doesn’t go above your target price, the trade won’t be executed. In that case, you’ll receive your deposit back + earned interest, that’s set to 50% APR.
In this case, the interest would come up at around 0.01BTC.
Also, if a BTC stays around the settlement price, you’ll likely receive a net positive return.
On the other hand, if the price drop during the subscription period, you might be at a loss in terms of FIAT currency. However, that likely doesn’t matter since you wouldn’t be selling your BTC at that low or at that settlement price anyway.
Scenario 2: Bitcoin Raises to your Target Price
If the price of your targeted coin is above your targeted price at the settlement date, the trade is executed.
In this case, you’ll receive USDT for the trade + earned interest. The interest will be around $171 in this case.
But keep in mind, if a third scenario happens and the price is substantially above the targeted price, your trade will still execute at the target price. This means that simply holding your Bitcoin and then selling it manually would have given a higher net return.
Binance Dual Investment Available Coins
There are two available stablecoins that you can use to subscribe to Binance Dual Investment, as one of the coins always has to be a dollar stablecoin.
- USDT
- BUSD
And a large list of main currencies:
- BTC
- ETH
- BNB
- LTC
- DOGE
- SOL
- MATIC
- ADA
- DOT
- XRP
- BCH
- AVAX
- FTM
- ALGO
- ATOM
- NEAR
The Risks of Binance Dual Investment
The biggest risk of dual investments comes in the fact that the subscription cannot be canceled. Once you lock your assets, you can’t withdraw them until the subscription period is over.
During the period, many things can happen on the market, and those funds won’t be available to you.
Also, the trade will always execute at the targeted price, no matter the market condition. For instance, if the price of BTC jumps to $30,000, but you are subscribed to sell high at $22,000, it’ll be sold at $22k, creating quite a huge loss.
Or on the other hand, if you chose a highly improbable price just to earn easy interest but then change your mind and want to sell your crypto, you can’t.
But overall, Binance dual investment is a powerful tool. You can easily use it to sell your coins. Instead of selling it on the spot market for a given price, you can subscribe at the same target price and earn interest on top of that.
Binance Dual Investment Quiz Answers
As was said in the introduction, to be able to use the Binance dual investment feature, you need to pass a short quiz that should test your knowledge about the product.
It’s not hard to pass, and we strongly advise you to study the product before using it. As it’s quite a complex product and no one wants to lose money.
But if you believe in your capabilities, here are the Binance Dual Investment Quiz answers.
1. What kind of product is Dual Investment?
Investment product where users have a chance to sell high or buy low at their desired target price on the desired settlement date which does not guarantee a minimum return.
2. What is the Target Price and Settlement Date in Dual Investment?
Target Price = the price at which I want to buy or sell cryptocurrency
Settlement Date = the date at which I want to buy or sell cryptocurrency
3. Once I subscribe, will my Target Price ever change?
The target price will not change once subscribed
4. I am hoping to sell my 1 BTC for 52,000 BUSD. I subscribed to the BTC Dual Investment “Sell High” product with a $52,000 Target Price to sell BTC.
At the Settlement Date, the BTC price is $52,500. How much will I receive at the end?
52,000 BUSD + interest yield in BUSD
5. I am hoping to buy 1 BNB at 330 USDT. I subscribed to BNB Dual Investment “Buy Low” product with a $330 Target Price to buy BNB.
At the settlement Date, the BNB price is $345. How much will I receive at the end?
330 USDT + interest yield in USDT
6. What are the risks of Dual Investment?
The risk is that if the market price on the Settlement Date goes far below my Target Price to buy, I am buying at a relatively higher price and vice-versa.
Binance Dual Investment Free BTC Subscription Quiz
Apart from passing the dual investment quiz to be able to use this product, there is currently an ongoing Dual investment quiz with a free BTC subscription as a reward.
In connection with this activity, we got a number of messages to include answers to this quiz in our Dual Investment article. And we do agree that this is a great opportunity, with plenty of time left to complete.
To access this quiz go to the Latest Activities in the Binance App and find the “Learn About Dual Investment & Complete a Quiz to Receive a Dual Investment BTC Subscription” activity.
Here are the answers to the Dual Investment Free BTC Subscription Survey:
1. Which of the following are not benefits of using Dual Investment?
Answer: Dual Investment is a risk-free product
2. For which scenario can users use Dual Investment?
Answer: Both A and B are correct
3. Which asset is not available in Dual Investment?
Answer: SHIB
4. In which wallet can users find their active Dual Investment subscription?
Answer: Earn Wallet
Conclusion
Binance dual investment is a lot more complex and advanced product than others from the earn line.
However, if done right, it can earn you regarding the current market state. You can also use it to simply sell your digital assets, as you would on the spot market, and earn extra interest during the subscription period.
But the benefits are highly diluted by greater risks. The main risk this product represents is the fact that you must lock your assets for a set period of time. During this time, anything can happen on the market.
Most importantly, if the price dips far bellow your targeted buy-low price or rises far above your sell-high target price, your assets will still be bought or sold at the target price.
We also recommend watching a quick official Binance tutorial. It’s just two minutes, that will cover your knowledge.
If you came to this article to learn about this interesting trading opportunity, you might also like our guide to Shorting Crypto.
Don’t worry, if you came here just for the quiz answers, we got you! You can check our Learn & Earn quiz answers archive for all interesting free crypto opportunities.