Everything You Need to Know About KuCoin Dual Investment

If you’ve ever wondered how to earn passive income the unconventional way in the crypto industry, then “Dual Investment” is a concept you might want to look into. But what exactly is dual investing, and how can you benefit from it?

Keep reading to unearth everything you need to know about dual investments.

Dual investment is a high-yield structured wealth management financial product involving two different currencies. It is a non-principal protected financial product with a floating return. The returns will be adjusted based on the predetermined benchmark called “Target Price.”

Put simply, users of a Dual Investment have to deposit one cryptocurrency and can earn income based on two assets. After a crypto asset is deposited, it will be locked and allows users to earn as the value of the investment asset increases. The amount that investors can earn will depend on how their staked asset performs at maturity.

Why is Dual Investment a Non-Principal-Protected Financial Product?

Dual Investment is a non-principal-protected product whose main risk comes from possible changes in market prices. When there is high volatility in the market, it may be difficult for users to predict potential differences between the target price and the market price at the time of maturity. Therefore, it may also be difficult to predict what the settlement currency will be. Therefore, before subscribing, make sure you understand the characteristics of the product as well as the potential risks.

For example:

User A invested 1 BTC to subscribe to a KuCoin Dual Investment product with a target price of 20,000, an APR of 300%, and a term of 14 days. When the product expires, user A will receive the following:

If the settlement price of BTC_USDT is ≥ 20,000, the payment will be settled in USDT, and the payment amount is = 1 * (1+300% * 14/365) * 20,000 = 22,301 USDT

If the price of BTC_USDT rises to 23,000, the original value of 1 BTC of user A is 23,000 USDT (if user A did not buy the double investment product at that time), and user A currently only has 22,301 USDT. The difference between the two is the implied loss, which is 699 USDT.

There are two types of Dual Investment products KuCoin offers:

• Buy Low - provides users with the chance to buy a cryptocurrency at a lower price in the future, while earning yields regardless of the market conditions.
• Sell High - provides users with the chance to sell a cryptocurrency at a higher price in the future, while earning yields regardless of the market conditions.

Dual investment products are a viable alternative to limit orders, as it offers a similar outcome while providing more options to users.

Why Should Users Start Using Dual Investment Products?

Users can subscribe to a Dual Investment product when they want to realize the following goals:

• Increase Cryptocurrency Holdings: Users can buy more cryptocurrencies when they have already held some cryptocurrencies and want to continue profiting from them.
• Hold More Stablecoins: Users can purchase more stablecoins when they have already owned some stablecoins and want to continue profiting from them.
• Buy at a Low Price: When the market is going down, users can buy cryptocurrency at the target price, i.e., to obtain higher yields by "buying the dip."
• Sell at a High Price: When the market is going up, users can sell cryptocurrency at the target price, i.e., to obtain higher yields by "sell the rallies."

To explain how to profit better, let’s look at some real-world examples using Bitcoin:

Example 1 - Sell High

In our first example, we want to sell 2 BTC in a year’s time at the price of 30,000 USDT, with the current BTC price sitting at 24,000 USDT. In this case, our subscription amount is 2 BTC, target price of 30,000 USDT, while the set investment yield comes up to 5%.

When our dual investment reaches maturity, we can face two scenarios:

1. Bitcoin’s price has increased by more than 6,000 USDT and jumped above 30,000 USDT. This means that the dual investment product automatically settles the position in our favor, selling our two bitcoins at our desired price. On top of that, we have earned a 5% yield on top of our position, totaling as much as 63,000 USDT!
2. Bitcoin’s price didn’t reach our desired price target, which means that the dual investment product automatically settles the position, again in our favor, by giving us a 5% yield paid out in BTC. In this scenario, our position is now worth 2.1 BTC.

Dual Investment: Sell High Product

Example 2 - Buy Low

In our second example, we want to buy some bitcoin in a year’s time at the price of 30,000 USDT per Bitcoin. In this case, our subscription amount is 50,000 USDT, target price of 20,000 USDT, while the set investment yield comes up to 5%.

When our dual investment reaches maturity, we can (once again) face two scenarios:

1. Bitcoin’s price has dropped by over 4,000 USDT and is now below 20,000 USDT. This means that the dual investment product automatically settles the position in our favor, buying 2.5 bitcoins at our desired price. On top of that, we have earned a 5% yield on top of our position, totaling our position to 2.625 BTC!
2. Bitcoin’s price didn’t reach our desired price target, which means that the dual investment product automatically settles the position, again in our favor, by giving us a 5% yield paid out in BTC. In this scenario, our position is now worth 52,500 USDT.

Dual Investment: Buy Low Product

Described below is a step-by-step procedure and requirements to participate in KuCoin’s dual investment product:

Logging In to the KuCoin Website

Users going through the KuCoin webpage can click on “Earn” and then find the “KuCoin Earn” icon. On the other hand, users going through the KuCoin app should locate and select “Earn” on the dashboard.

Finding the KuCoin Dual Investment Page

Selecting Your Preferred Product

KuCoin offers a basket of dual investment products, all with varying target prices, terms, and APR. The platform will offer BTC / BTC-U and ETH / ETH-U products at the start, with more dual investment opportunities to come.

The BTC series refers to products that can be purchased using bitcoins, while BTC-U refers to series that can be purchased using USDT, with the benchmark pair being BTC-USDT.

That said, you can select any of the products in each series based on your preferences.

Selecting a Dual Investment Product

Beginner Test Run

KuCoin holds investor protection and security as one of its primary objectives. As such, the exchange ensures investors know what they are getting into and the risks involved.

That being said, dual investment first-timers would be required to partake in a quick novice test, where they have to answer all questions correctly before proceeding to purchase the product. While this is used to gauge the expert level of an investor, it doubles as an educational tool for beginners.

Subscribing to a Dual Investment Product

After passing the test run, investors can click on the subscription page of their preferred series after filling the quantity input bar. They will see the potential earnings and product rules afterward.

Dual Investment Subscription Modal

Final Review & Transaction Confirmation

After selecting your subscription, users will have to view the investment page to confirm all the details inputted and confirm the transaction.

Final Dual Investment Subscription Overview

Other Information

As mentioned earlier, dual investments are settled automatically at the maturation date. Additionally, settlement is judged based on the spot price of the asset at the time of settlement against the price linked to the user’s subscription.

Dual investment offers several benefits when compared to regular investing, namely:

Buy-Low and Sell-High

One of the benefits of dual investments is that they allow you to earn from buying crypto low and selling high, thereby aligning you with the primary rule of investing.

Passive Income

With dual investments, you earn a steady passive income on your position regardless of the direction the market tilts towards.

Potential Risk

Though dual investment enables you to buy low and sell high, it’s not risk-free. In real scenarios, you might miss rising price trends when your assets are locked away for a set duration. By the time you can settle BTC, you could find yourself making more money at a more favorable price if you buy and hold BTC.

KuCoin’s dual investment products are a great way to earn passive income in the crypto market, while fulfilling your buying and selling goals.

Additionally, market volatility (which is abundant in the crypto market) can work in your favor when done right. However, the crypto market does come with risks warranting caution from investors. As a rule of thumb, always take time to do your own research (DYOR) on a product before committing real funds.