Optical satellite links open up new prospects for realizing quantum physical experiments over unprecedented length scales. We analyze and affirm the feasibility of detecting quantum squeezing in an optical mode with homodyne detection of only one bit resolution, as is found in satellites already in orbit. We show experimentally that, in combination with a coherent displacement, a binary homodyne detector can still detect quantum squeezing efficiently even under high loss. The sample overhead in comparison to non-discretized homodyne detection is merely a factor of 3.3.The laws of quantum mechanics have been validated by numerous fundamental tests [1]. With the advent of optical satellite links [2][3][4][5][6] it is now possible to also validate quantum mechanics over vast distances and a varying gravitational potentials. This includes nonclassical states [7] such as quadrature squeezed states of the light field [8,9]. Squeezing is efficiently measured via homodyne detection [10], a measurement technique of utmost importance not only in optics, but in diverse physical architectures such as optomechanical resonators [11], superconducting qubits [12,13], spin ensembles [14-17] and Bose-Einstein condensates [18]. Homodyne detection yields continuously distributed quadrature projections, which in practice are sometimes deliberately discretized. In optical quantum information processing [19][20][21][22][23] this is exemplified by quantum key distribution protocols [24], and by tests of Bell's inequalities [25][26][27][28][29], which inherently require to discretize the homodyne outcomes to binary values.Optical homodyne detectors are ubiquitous in telecommunications and can even be found on optical satellites already in orbit. Such satellites are promising candidates for exploring quantum technology and bringing fundamental tests of quantum mechanics to space both rapidly and cost-effectively. Satellite links, however, imply considerable channel loss which reduces the observable squeezing value. Moreover, as currently the primary application of optical satellites is classical communication via binary phase-shift keying, only the sign of the homodyne signal is relevant and the data is often projected into binary outcomes during signal processing [30,31]. The question arises whether under such strong technical constraints quadrature squeezing can still be detected.Extreme discretization into binary outcomes has been studied extensively for photon number measurements. Photon "on-off" detection and the photon number parity measurement were shown to allow for (near-) optimal applications in quantum state discrimination [32][33][34][35][36] and quantum optical metrology [37-42]. Discretized homodyne detection schemes were used for witnessing single photon entanglement [43] and for super-resolved imaging with coherent states [44].In this Letter, we investigate fundamental limits of discretized homodyne measurements, particularly focusing on the detection of quadrature squeezing. We consider the extreme case of a binary homody...