Education By  Yuliia Rokytska
Newbie 4765 23 Sept 2022

How is crypto profit calculated?

By  Yuliia Rokytska 4765 23 Sept 2022
Photo - How is crypto profit calculated?

The ability to determine the potential income from trading will allow you to use proper money management so you can manage your funds efficiently and rationally while trading in the crypto market.

Simple Mathematics

There are at least 5 simple ways to calculate crypto profit if you are doing short-term trading or investing in long-term cryptocurrencies. You calculate crypto profit by dividing the original value by the current value and then multiplying the difference by 100. Let’s take a look at an example of how this calculation method works. Let's imagine that you bought some crypto at the price of $30 per coin and the current price is $50 for the same coin. So in order to calculate your profits in percentage: 50/30 = 1.6 * 100 = 160%. Thus, you get 160% return on your investment. 

Now you know how to calculate your crypto profit by using a simple math formula. However, keep in mind that cryptocurrencies are very volatile, as the prices are going up and down depending on the trend predominated in the market. Therefore, watch the prices in order to take profits, not losses.

Subtraction of Sell from Buy Value

If you are doing day trading, the fastest way to calculate your crypto profit is to subtract the selling price from the buying price. Please note: the cost of buying and selling crypto is not only the price of the asset itself, but it includes any trading commissions and/or fees.

For example, you purchased tokens for $100 and now you want to sell them for $150. It is not difficult to guess that the income will be $50. Now you need to subtract the trading costs from this amount and you will get the net profit.

Unrealized Gains

Crypto investors are calculating their unrealized gains in order to monitor how successfully the process of increasing profits is going. Unrealized gains refer to an increase in the value of an asset that hasn't been sold yet. Sometimes such profit is called "floating".

It is the difference between the entry price and the current price. Let's say you bought any crypto with a $10 entry price, and six months later the price increased by another $10, so unrealized gain would then be $10.

It is not worth focusing only on this indicator, since an increase in the value of your investments without withdrawals does not mean that this is your “real money”. 

Multiplying Investments by the Percentage of Cryptocurrency Growth

Another way to calculate crypto profit is to multiply your investment by the percentage of cryptocurrency growth in decimal form. For example, you invested $2,000 and the price for your crypto grew by 20%, then your profit will be: 2000 x 0.2* = $400.

*decimal form (percentage divided by 100). 

Crypto Profit Calculator

The crypto profit calculator will help to facilitate and speed up the process of calculating the profit. It takes into consideration all components of trading at once: the market price of an asset, the number of coins purchased, exchange fees and commissions.

Eventually you will get an accurate result, excluding human factors in the calculations. The calculator will make it easier to track profits and allow you to make the right decision regarding short or long term trading. There are many different services for calculating cryptocurrency profit, which differ in their functionality and purpose.

For instance, you can use the Sabe universal calculator. It will help you to find out your crypto profit in a matter of a few minutes. To do this, enter the name of the purchased cryptocurrency, the number of coins and the entry price. Sabe works with the data presented on the CoinMarketCap website.

Easy Bitcoin Calculator is a great option for those who want to calculate BTC return. To make the calculations, enter the current price of Bitcoin, the entry price, the amount of coins and the amount of transaction costs. You can also choose between long and short calculation methods.

Remember, trading in the crypto market is risky and unpredictable. Therefore, to calculate profit using any of the methods listed above will be the right decision.