How to Calculate ROI of Your Crypto Investment

How to Calculate ROI of Your Crypto Investment


As scary as it may sound, it’s not beyond the capabilities of a person who knows how to push buttons on a calculator and reads this neat little guide. Crypto ROI calculations apply the classic ROI equation to explain crypto investment returns. This can resemble a stock investment, based on familiar variables of starting price, ending price, and fees. For others, such as those engaged in liquidity pools, farming, and staking, the math is more complex. It gets historical price data from and calculates the return.

  • You bought 1 BTC for $30,000 , thus your cost basis for this lot of 1 BTC is $30,000.
  • After reviewing the available projects, we recommend Battle Infinity and Lucky Block as the best ROI projects in 2022.
  • According to this calculation method, we made a 50% profit ($5,000).
  • This method of calculating your trades takes into account the opportunity cost of holding on to Bitcoin as opposed to using your BTC to purchase other altcoins.
  • Bitcoin is already a somewhat established asset, and its ROI has historically been the highest compared to other assets.
  • Then, you have to divide the result by the actual cost of the investment.

Whether you’re a crypto investor, learning the stock market or just learning about the business world, the knowledge packed in our crypto calculator can come in handy. There are more steps to this one because it has to factor in different time frames. It helps when comparing multiple crypto investments to each other. Disclaimer – The investment return quoted should not be considered as an advice on whether to invest in bitcoin or any other crypto. Kindly, do your research or contact a financial advisor before taking any investment decision. Kubera will take these elements, as well as time passed, into account to automatically calculate the IRR of an asset.

How to use the crypt return calculator

For example, if the current price of Bitcoin is USD $10,000 and you’re planning to buy USD $1,000 worth of Bitcoin, you’d get 0.10 BTC for your USD $1,000. If the price of a Bitcoin goes up 50% to USD $30,000 each, then your BTC has also increased by 50%, thereby valuing your 0.05 BTC at a great USD $1,500. You would get a profit of USD $500 if you sold all your BTC and cashed-out your investment. The Navexa portfolio tracker calculates performance for stock and cryptocurrency holdings, including capital gains, currency gain tracking, income tracking and more.

Furthermore, the IBAT Battle Stake Arena lets stake their IBAT tokens to receive a potentially high Annual Percentage Yield in return. Lucky Block is an NFT Competitions game that use LBLOCK, its native crypto, to distribute rewards. Users can participate in weekly main draws, and NFT draws and stand a chance to earn up to USD 50,0000 in rewards. After releasing in January 2022, LBLOCK soared by over 1,100% in the first two weeks.

How is cryptocurrency taxed?

After reducing the original price from the current BTC price, users will get the value of USD 40,000. Then USD 40,000 must be divided by the original price, which is USD 20,000. Kubera is easily one of the premier fintechs I’ve come across. This is why we made it the cornerstone of our tech at 401 Financial. The future for advisers will be providing a personalized hybrid experience at scale and Kubera makes this nextgen aspiration a right now experience for our clients.” Just like ROI, the higher this number — also represented as a percentage — the better an investment is likely to perform.

calculate your crypto

Before you invest, look at the coin’s roadmap, whitepaper, social media channels, and exchanges that it’s listed on. Look at its price history and the total supply of coins/tokens being created. Don’t succumb to FOMO and buy into a coin that has just skyrocketed in price because of hype; this is a surefire way to lose money quickly! Stay away from hype-driven coins and focus on projects with real-world use cases instead. ROI can be used in conjunction with the rate of return , which takes into account a project’s time frame. One may also use net present value , which accounts for differences in the value of money over time, due to inflation.

It Isn’t Easy to Track Expenses With ROI

You should consider whether you understand how an investment works and whether you can afford to take the high risk of losing your money. As an investor, make sure you always do your research and ask hard questions about how well a project addresses its market opportunity. We encourage you to learn more about the project’s technology, how it works, and whether it has any kind of existing community or real-world use case. The first step to successful ICO investing is learning as much as you can about the projects that interest you. Take time to learn about the team, product, and community behind each project before deciding where to invest.

What is a good take profit for crypto?

People have different preferences depending on how much risk they're willing to take. However, most traders target at least 50% before they take profits. That being said, you can target 100% profits too before you decide to take. You can even target higher percentages.

Our estimates are based on past market performance, and past performance is not a guarantee of future performance. These things may not seem important at first glance—but they could determine whether your investment pays off or burns. By keeping these seven tips in mind, you can set yourself up for success as a crypto investor. Being prepared for a rollercoaster ride will help you navigate that uncertainty with confidence and find success in the long term. If you want to take advantage of the potential for long-term growth in the crypto market, then yes, you should reinvest your profits. However, if you bought 1 bitcoin for $10K but sold half of it at $11K and kept the rest, things get a little trickier because now there are two transactions with different prices involved.

Keeping calm while others panic is one of XRP the best indicators of whether or not someone knows what they are doing when it comes to calculate crypto return investing. Let’s do a more specific example, you got into the bitcoin markets and bought some at $50,000 and sold at $35,000. Specifically, that’s 12.86% extra you now need to make than what you lost. Receive posts on investing, markets & more direct to your inbox. They should also account for the dates when they bought and sold an asset. Even the experienced trader who deals with gold might test out the waters and get into crypto, ready to take the risks.

You can use it to measure annual returns in order to see whether certain crypto holdings are worthwhile. GAL There are over 1,500 coins and tokens available in the cryptocurrency market, and a majority of them cannot be acquired using USD or any fiat currencies. The only way to acquire the majority of these coins is through buying Bitcoin first and then converting your BTC to any of these alternative coins .

Calculate Your Earnings.

The ROI on Jo’s holdings in Big-Sale would be $800/$2,000, or 40%. ROI does not take into account the holding period or passage of time, and so it can miss opportunity costs of investing elsewhere. ROI can be used to make apples-to-apples comparisons and rank investments in different projects or assets. To calculate ROI, the benefit of an investment is divided by the cost of the investment.

The following sections provide users with a few tips for crypto investing to potentially maximize profits. All transactions that has been considered to calculate the total return can be found in the transaction table. It shows you different data points that we have taken into account to reach the final outcome. Investment Time – It is the tenure of your investment i.e total time you will remain invested in Bitcoin. When all of this information is plugged into Kubera, we see that the IRR is close to 23%.

Recently, certain investors and businesses have taken an interest in the development of new forms of ROIs, called “social return on investment,” or SROI. Annual crypto tax calculation can feel like an overwhelming chore, especially if you’ve been an active trader. It’s important to properly calculate both gains when calculating crypto taxes. Acrypto tax calculatorlike ours at TokenTax will help with this.

For instance, an investment with a profit of $100 and a cost of $100 would have an ROI of 1, or 100% when expressed as a percentage. Although ROI is a quick and easy way to estimate the success of an investment, it has some serious limitations. For instance, ROI fails to reflect the time value of money, and it can be difficult to meaningfully compare ROIs because some investments will take longer to generate a profit than others. For this reason, professional investors tend to use other metrics, such as net present value or the internal rate of return .

How much should I hold in crypto?

In fact, investing 5% of your portfolio in crypto is an often-quoted percentage of your net worth to tie up in crypto assets. Some experts recommend starting much lower, with just a 1% investment in cryptocurrency and the remaining 99% of your portfolio going to stocks and other traditional investments.

Each country has different rules about how much tax you pay on capital gains/losses, depending on how long you held the asset before selling it. On the other hand, calculating ROI on a crypto investment could be tricky, as investors often forget to account for their trading fees and other expenses they managed. However, experienced investors know that the crypto market is unstable and that ROI on most crypto assets can become negative if the coins face a massive sellout. Gains on crypto are not “realized” until you sell, exchange, or spend the asset. In other words, if you purchased a token and simply hold it without selling or exchanging it for another token, you won’t have any taxable gains or losses. Subtract the cost basis of $30,000 from the proceeds of $32,000, and your gain is $2,000.

Users can also engage in the Battle Arena – a metaverse and virtual ecosystem on Battle Infinity. The formula behind this result is almost as simple as the one above. It’s the final amount you enter divided by the starting amount.

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Bithumb Global is one of the leading exchanges in the world. We offer you an ideal platform to get started in crypto trading. Stay tuned for more articles that simplify crypto trading for you. And the rate of return can be calculated by multiplying ROI by 100. You may have heard the word ROI even before entering crypto trading. ROI is used in all businesses and trades, it is not just limited to the crypto industry.

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