Mid December 2022 I was introduced to Dual Investment on the KuCoin exchange. Its put forward as an advanced strategy and I would agree because it seems to have a lot of moving parts. I am still trying to fully understand the engineering behind it but I will put forward what I think is happening. Please feel free to correct me in the comments.
The reason why it is called Dual Investment is because there is the possibility of your investment being returned in one of two currencies. I was using investing in Bitcoin, the return could be in either Bitcoin or Tether.
The returns of a dual investment are based on settlement date and target price. When setting up the investments I can pick how far out I want to set the settlement date and what the target price would be.
In the above real world example, the currency is BTC the target price is $16,800 USDT the settlement date is 1.7 days from now and the target APY is 81.13%.
If at the time of settlement the BTC spot price falls below the target price, your investment will return your BTC + interest in BTC. If the BTC spot price is above the target price the investment will return USDT + interest in USDT.
This may seem like you are winning either way, from what I can surmise that is only half true. Yes you are gaining in USDT value either way, but now you are getting upside risk. This is a bear market strategy. If the trend is downwards you can add BTC to your position with fairly little risk, but we are inching towards capitulation and the inflection point. If you are focused on accumulating one currency like I am, it is possible to be priced out.
Lets say I open a dual investment with the settlement price at 17,000, then BTC goes on a run while my Bitcoin is invested. At settlement date I will receive more value in USDT than what I initially invested but I won't be able to buy the same amount of BTC. So my account values will be higher, but I will lose in total amount of BTC and I will not get the upside of the price increase.
With my Publish0x earnings I am going to Dual Invest Etherium as tightly as I can and see how much value in USDT I can build.
At least this is how I understand it.
Here is the tutorial video that KuCoin made. It is jargon heavy, but you may find it helpful.
I executed 10 BTC Dual Investments in a row and I am pretty happy with the results.
I started with 0.0409 BTC less than 3 weeks later I ended the 10 investment cycle with 0.042481 BTC. An increase of 0.00158061 BTC. This is effectively hitting my monthly accumulation target without paying any analog currency.
9 out of 10 dual investments returned in BTC. With the one USDT return I was luck that the price finished above the target price but was already back below that price before I woke up and I was able to buy back into BTC with a larger position size.
The compounding potential with Dual Investment exciting, but at this point in the cycle I may back off and from using this strategy with my BTC as the risk of getting price out the upside gets larger everyday. I may wait for the break out to the downside before starting another chain.
Let me know your experience using Dual Investment or if I am way off in my understanding.
My KuCoin referral code is:
https://www.kucoin.com/ucenter/signup?rcode=rM3Y31U
remember keep building in a bear market!
As always you can join the conversation on Twitter @1BTCproject
And keep track of my crypto journal on my other blog - http://635ed752b3bfb.site123.me/
