Crypto is one of the most trending topics around the world nowadays. Investors worldwide are now keen on investing in it after watching its profit in 2021. Some people anticipate its instability and doubt how safe it is, but with the coming time, people are becoming more open to it.
How to calculate Crypto Profit?
The main aim of the people investing in crypto is to earn profit. As the digital currency is mainly volatile and its value keeps changing, it is essential for investors to keep track of it and to know when is the correct time to sell their assets. An investment tip one should never forget is never to sell an asset at a loss. If you are in the crypto investment, you should have the patience to observe the market.
Well, with such high numbers and quick changes in value, it could be a little challenging to know whether you have made a profit or loss. We have a few solutions that will help you calculate your crypto profit or crypto gains. The task is not as intimidating as it seems, and trust us, there is no rocket science involved.
The difference between selling and buying price
The first process is easy, to check the difference between the value you have bought and on which you have sold. You can subtract the value of the sale from buying value.
We can take the example of bitcoin as it is the most famous and mainstream crypto coin. So suppose you bought bitcoin of value $40000 and now you are selling it at $48000 so to find whether profit or loss, you can subtract the value of sale from the buying value. So it will be profit=$48000-$40000= $8000.
As a result of this, $8000 will be the profit you earned from your crypto investment. We can take an example of loss too. Suppose you bought crypto at $40000 and are selling it at $38000, so we have profit/loss=$38000-$40000, which is -$2000.the negative value here suggests the loss of $2000.
Now, if you have to find out the profit/loss from the price of bitcoin, you can use (number of bitcoins bought)*(selling price)-(buying price)
We can retake an example suppose you bought ten bitcoin, each at $3000, and now you are selling each of them for $4000, so profit would be
10*($4000-$3000)=$10000 is the profit you will earn on all of them.
As the earlier crypto market is volatile, the price can see a sudden surge and then go down all the way. Many investors sell their assets at a loss when the market goes down, but this should not be the case. To make a profit, it is essential to keep a close watch on the variation of prices.
Calculating through percentage
The other way and one of the popular ways to check your profit is through percentage. Many investors use this to tell accurate numbers, and you can set the amount of profit you want to have. There are a few things to keep in mind, such as deciding the profit you want to make through good investment.
If you have decided the percentage of profit you want to make, such as 10%, 20%, 50% etc., you should know its percentage expression. So suppose if you’re going to make a profit of 10%, it will be denoted by 1.1; if you want to make a profit of 20%, it will be represented as 1.2 as in a similar pattern it goes on.
So to check this, you should be familiar with the buying price of the crypto and the percentage expression. So you have to multiply the amount paid while buying crypto with its percentage expression as told above.
If you are aiming to gain a profit of 50 %, and you have bought a bitcoin at $40000, and you want to make a profit of 50%, that is 1.5. so it will be $40000*1.5=$60000. So the $40000 is what you invested, and $20000 is your profit. Like this, you can find it for several altcoins for different profit percentages.
Use spreadsheet
If you want to escape all these calculations, then another more systematic way of finding out the profit in crypto would be to use a spreadsheet. People use a spreadsheet to account for the number of coins that are bought, and it is appropriately organised. In order to maintain a spreadsheet, there are a few mandatory sections that you should add to your excel sheet.
This is used across the world in a similar pattern. The sections are,
- The type of coin/name of the coin you are investing in, e.g.:- Bitcoin, Ethereum, ripple and many more.
- Number/unit you purchased
- The date and time you bought the coins.
- The amount of money you invested/entry fees
- The date-time of selling the coin
- The amount at which you sold.
This is the format for the spreadsheet; you can add more functions for fast calculation or anything.
Calculate using crypto profit calculators
Finally, the easiest and most accurate way to calculate your crypto profit is to use a crypto calculator app. the app will use all the functions once you fill in the data regarding your investment.
You can use several crypto profit calculators available for internet use. Most of them give accurate results in just a few seconds. The app will ask about the day you bought the asset and sold it, the amount of money invested, or the units of currency bought.
The app will give the value of your investment today. Then it will present your total returns. It will also feature the amount of profit you gained from the trading business. Some apps include government taxes and trading prices, which gives a more accurate result of what you will be gaining from the profit.
Conclusion
It would be best to trade them at the correct time; otherwise, you can face loss. An alert investor can make the most out of an asset by selling it at peak time, as a beginner you can learn all the trading strategies on the website the-bitcoin-millionaireapp.com/pl. People are investing in crypto because it is safe from deflation and gives more gain than other investments such as gold, PF, real estate etc. It is predicted that cryptocurrencies will surge more, a significant investment. The ways to calculate profit above will give you the required result on what profit you have earned.