Published on May 5th, 2023
There are many easy ways to calculate your profits when dealing with cryptocurrency. Check out this article to learn about the most straightforward solutions with examples.
Use Basic Math
It’s a simple technique that includes subtracting the full cost of purchasing cryptocurrency from the total selling price of the digital currency. Here’s a step-by-step way to calculate your profits using basic mathematics:
- Calculate the total cost of purchasing cryptocurrency. The entire cost of purchasing cryptocurrency is the first step, including any fees or charges for buying the cryptocurrency. For example, if you paid $20,000 for 1 BTC and a $50 charge to the exchange, your total cost would be $20,050.
- Determine the cryptocurrency’s total selling price. The next step is to determine the cryptocurrency’s overall selling price. The calculation includes any fees or charges incurred from selling the coin. For example, if you sold 1 BTC for $22,000 and paid the exchange a charge of $80, your total selling price would be $21,920.
- Subtract the total cost from the total selling price. Finally, subtract the total cost of purchasing cryptocurrency from the total selling price of the cryptocurrency. This will calculate your profit or loss. In this case, subtract $20,050 from $21,920 to get the profit of 1870.
You may use this method to do simple calculations. However, ensure you don’t make mistakes, especially when calculating fees. The easier way to perform this calculation is to use a cryptocurrency exchange calculator.
Use A Cryptocurrency Calculator
A cryptocurrency price calculator is a simple tool that enables investors to understand how much profit they gain. To provide an exact estimate of your profits, these calculators consider several aspects, such as purchase price, selling price, fees, and the period a user plans to hold the asset. Here are some general instructions for using the calculator:
- Select a cryptocurrency calculator. There are numerous crypto calculators available on the internet. To get precise results, use a reputable and trustworthy calculator.
- Enter financial operation details. After you’ve decided on a calculator, enter the details of your trade. This covers the cryptocurrency’s name, purchase, and sale prices, quantity, fees, and holding time.
- Check out the profit. Once you’ve entered your trade information, the calculator will calculate your profit. Additional information, such as percentage profit, ROI, and tax implications, may be provided by some calculators.
Overall, this may be the simplest and cheapest solution for traders and investors.
Percentage Profit By Multiplication
Another simple way to calculate your cryptocurrency gains is to multiply by the profit percentage. It’s a convenient solution if you’re more into determining the percentage of your profit rather than focusing on numbers. Here’s how it works:
- Determine the purchase price of the cryptocurrency. This step includes any fees or charges for purchasing the cryptocurrency. For example, if you paid $3,000 for 15 SOLs and a $10 fee for the exchange, your total cost would be $3,010.
- Determine the cryptocurrency’s selling price. Now calculate the selling cost, which includes any fees or charges incurred when selling the coin. If you sold 15 SOLs for $4,648 and paid a $20 fee to the exchange, your selling price would be $4,668.
- Determine the profit. It’s the difference between the selling and purchasing prices. In this case, it’s $1,668.
- Determine the profit percentage. Once you’ve calculated the profit, divide it by the purchase price and multiply by 100 to get the percentage profit. In this case, it’s ($1,668 / $3,010) x 100 = 55.4%.
This means that you made a 55.4% profit on your trade.
Subtract The Selling Price From The Buying Cost
Another way to calculate your crypto profits is to subtract the selling price from the purchase price. It’s a method similar to the first one mentioned in this article (basic math), but it’s reversed. You must subtract the selling price from the buying cost, not vice versa. Here’s what you should do:
- Determine the crypto’s buying cost. The first step is to determine the cryptocurrency’s purchase price. This includes any fees or charges for purchasing the cryptocurrency. For example, if you paid $27,800 for 1 BTC and a $100 fee to the exchange, your total cost would be $27,900.
- Determine the crypto’s selling cost. The next stage is to calculate the cryptocurrency’s selling price. This includes any fees or charges incurred from selling the coin. If you sold 1 BTC for $29,000 and paid a $120 fee to the exchange, your selling price would be $29,120.
- Subtract selling from buying costs. Deduct the cryptocurrency’s selling price from the purchase price. This will calculate your profit or loss. In this case, it’s $27,900-$29,120, so you get $1,220.
It’s a basic method, but effective nonetheless.
Use Unrealized Profit
This simple method is based on the fact that you don’t sell your cryptocurrency but merely calculate the profit you would get if you sold the coin at this moment. That’s why the method is called “unrealized profit.”
The calculation shows the difference between the cryptocurrency’s current market value and the trader’s purchase price. Here’s how to calculate your profits using the unrealized profit method:
- Determine your asset’s current market value. The simplest option is to look up the current price of the cryptocurrency on an exchange or by utilizing a price tracking tool.
- Recall the price at which you purchased the asset. The next step is to recall the initial price at which you purchased the coin or token. The easiest option is to check out your transaction history or trading journal if you have one.
- Calculate the unrealized profit. It’s the difference between the current market value and the purchase price. For example, if you paid $20,000 for 1 BTC and the current market value is $29,800, your unrealized profit would be $9,800.
Note: this method doesn’t calculate transactions, withdrawals, and other fees. Thus, it’s not accurate.
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