Binance Dual Investment: Earn Wherever the Market Goes
Have you always wanted to grow your crypto holdings with Binance Savings, only to end up not pushing through because you’re worried about how the market will move in the near future? Then we have a solution for you.
Earn more money from your crypto holdings with Binance Dual Investment, a new crypto investment product created by Binance Pool. With Binance Dual Investment, you can commit your crypto holdings and lock in a savings yield, but earn even more if the market price on your crypto holdings increases.
The return on your savings will depend on how the crypto market has moved since the day you invested your crypto into Binance Dual Investment. If the market price on your crypto holdings increases, so that your earnings exceed the savings rate, you’ll get the higher amount. If the market price on your crypto holdings dips or your earnings don’t exceed the savings rate, you’ll still get the yield from your savings. The bottom line is, your return will be allocated to your benefit.We’re launching Binance Dual Investment with investment products in Bitcoin (BTC) and BUSD.
Terms You Should Know About Binance Dual Investment
Before we proceed with explaining how the product works, we should start defining some terms.
- Investment Date. This is when the term of the savings product starts. During this period, your entire amount of investment should be in your exchange wallet.
- Expiry Date. This is when you can redeem the crypto you saved, plus interest, either in the form of BTC or BUSD. More on that later.
- Settlement Price. This is the price of the crypto at the expiry date. This is determined through an average value of a reference index, which is the weighted average of BTC-USD spot prices across Bitstamp, Bittrex, Coinbase Pro, Gemini, Kraken, Itbit, and LMAX Digital, excluding the highest and lowest prices at the time.
- Strike Price. This is the threshold price that determines which form of return you’ll get.
- Rate of Return. This determines how big your interest will be after the expiry date.
- Annualized Rate of Return. This would be your interest rate if the rate of return is stretched over the duration of 360 days. If, for example, your rate of return over a 30-day investment is 1%, your annualized rate will be 12% (or 1% divided by 30 days, then multiplied by 360 days).
BTC Dual Investment Product
The BTC Dual Investment product serves as a hedging tool for BTC holders. The idea here is that when the BTC price goes above a strike price, your returns will be in the form of BUSD, allowing you to sell out of your BTC at a rate higher than the spot price on the markets. Otherwise, you’ll get back your BTC with interest.
Let’s say you saved up 1 BTC on a 30-day product on August 1, when BTC was priced at $11,000 at a 2% rate of return. The strike price is set at $15,000. On August 30, either of the two things will happen:
- If BTC is at or above $15,000, your 1 BTC turns into 15,000 BUSD plus the 2% interest worth 300 BUSD.
- If BTC is below $15,000, you get back your 1 BTC, plus the 2% interest worth 0.02 BTC.
BUSD Dual Investment Product
Meanwhile, the BUSD Dual Investment product gives BUSD holders the opportunity to buy BTC at a price lower than the spot price on the markets. Otherwise, you’ll get back your BUSD with interest.
Let’s say you saved up 11,000 BUSD on a 30-day product with a 2% rate of return on August 1, when that amount was worth 1 BTC. The strike price is set at $9,000. On August 30, either of the two things will happen:
- If BTC is above $9,000, you get back your 11,000 BUSD plus the 2% interest worth 220 BUSD.
- If BTC is at or below $9,000, your 11,000 BUSD turns into 1 BTC, plus the 2% interest worth 0.02 BTC.
Regardless of where the market goes, Binance Dual Investment ensures that you get the best possible outcome out of your savings.