For many crypto industry investors, this might be the first time hearing about "dual currency investment," or they may have a vague understanding of the concept. Recently, Binance Square hosted an AMA focused on dual currency investment, providing a detailed explanation of its mechanism and some advice for beginners.

The guests included: Data Trader from Trader's Circle, Binance Square Creator Chain Research Society, Crypto Options Player and Weibo Finance KOL Long Xin Yan, Binance Finance Vivian. Here is the essence of the AMA:

What is Dual Currency Investment?

Long Xin Yan: Dual currency investment is a passive financial tool, with an operating principle similar to the deposit mechanism in real estate transactions. For example, when you want to buy a second-hand house, you need to pay a deposit to lock in the price and prevent default during delivery. In dual currency investment:

· You act as the "seller" collecting a premium (similar to a deposit)

· Promise to buy/sell cryptocurrency at an agreed price in the future

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

Chain Research Society: This is actually a simplified version of options strategies in traditional financial markets:

· Buy the dips = Selling put options (taking over with USDT)

· Escaping peaks = Selling call options (locking in selling price)

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

Vivian: Familiar to Binance Finance users, we provide various investment choices, from principal-protected products (like current and fixed financial products, similar to bank deposits) to high-risk, high-yield products (like dual currency investment). For users looking to optimize capital efficiency, dual currency investment is a tool worth paying attention to.

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

· Traditional Limit Order: Placing an order in the spot market (e.g., BTC current price 93,000, selling at 100,000), waiting for market trigger, with funds idle and no returns.

· Dual Currency Investment: Similarly set a target price (e.g., selling BTC at 100,000), but additionally earn premium interest (annualized around 20%-100%+). Earn returns regardless of whether the trade is executed.

Characteristics of Binance Dual Currency Investment

1. High Returns

· Basic annualized rate starting from 3.65%, with some short-term products reaching 20%-200%.

· Actual return formula: Annualized return × (holding days/365), longer holding time means more returns.

2. Flexible Periods

· Short-term (within 7 days): Suitable for capturing market fluctuations, price difference around 15% (e.g., BTC current price 93,000, can set sell at 105,000).

· Long-term (6 months): Suitable for stable strategies, can set higher target prices (e.g., selling BTC at 130,000).

3. Simple Operation

· Supports mainstream cryptocurrencies (BTC, ETH, etc.), minimum investment of 0.1U.

· No complex operations, automatically execute after setting price and period.

Of course, dual currency investment is not completely principal-protected and may miss opportunities due to significant price increases. Long Xin Yan gave us an example: In December 2023, a typical case where a user, seeking 300% annualized returns, set a BTC order at 95,000 to sell at 100,000 (only 5% price difference), but the price surged to 110,000 within a week. Although earning the premium, they missed a 15,000/coin price increase.

Suitable Users and Beginner's Guide for Dual Currency Investment

· Hodlers: Earn interest while holding coins, avoiding idle funds.

· Swing Traders: Earn an additional premium compared to regular limit orders.

· Conservative Investors: Choose long-term with wider price differences (over 15%), reducing exercise risk.

For users just starting with dual currency investment, risk management is crucial. The guests also provided some tips:

1. Small-scale trial: Try with 0.1 BTC or 100U

2. Choose safe margins: Price difference > 15% (e.g., BTC order to sell at 107,000)

3. Period selection: Prioritize 14-30 day products

4. Hedging preparation: Reserve 20% funds to handle extreme market conditions

Additionally, for common user questions, the guests also provided answers. Regarding how to determine if the current market is suitable for dual currency investment, Long Xin Yan mentioned two main indicators: first, volatility index > 80 (high premium during panic), second, sideways period: BTC oscillating within 5% for over 2 weeks. For users wanting to remedy after being exercised, Chain Research Society provided a solution: if you have a BTC dual currency order to sell at 100,000 but the price rises to 120,000 and is exercised, immediately open a perpetual contract long position with 10% position, wait for pullback to 110,000 to close, and use the profits to re-place a sell order at 110,000.

For Altcoins, investment should be more cautious. A good strategy is to only sell high, not buy the dips (high liquidity risk), and set a price difference > 30% (e.g., current price 100, order to sell at 130).

To Investors

Finally, we want to remind users that dual currency investment is not completely principal-protected. Any investment decision requires careful consideration. Dual currency is a "time for space" game, suitable for patient investors. Always keep 30% cash on hand to deal with black swan events.

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