The cryptocurrency market is becoming increasingly competitive as more people are jumping on the bandwagon, trying to earn some money by investing in cryptocurrencies such as Bitcoin (BTC). However, many find themselves confused by the whole process and unsure how to calculate their Bitcoin gains.
As it happens, the return on investment (ROI) is calculated in the same way in the crypto world as it is in the traditional financial world. In other words, to calculate the percentage gain of one’s crypto investment, the investor first needs to determine the asset’s purchase price.
The next step is to subtract the digital asset’s purchase price from its selling price to arrive at the result, which is either a return or loss on this crypto investment. Then, the investor takes this figure and divides it by the original purchase price. Finally, the result is multiplied by 100 to arrive at the percentage change in the investment – loss or profit.
Examples in practice
Let’s say a person bought $30,000 worth of Bitcoin and sold it for $25,000. This would represent a loss of $5,000 or 16.67%. To arrive at this number, it is necessary to subtract $25,000 (selling price) from $30,000 (purchase price). Dividing this figure ($5,000) by $30,000 (purchase price), the result is 0.167, which, multiplied by 100, equals 16.7% or a loss of -16.7%.
Now, say the opposite scenario happens. The investor buys Bitcoin for $30,000 and sells it for $45,000. In this situation, they would have a gain of $15,000 or 50%. This figure is the result of determining the change between the purchase and selling price – in this case subtracting $30,000 from $45,000 and dividing the figure by $30,000. The resulting number (0.5) multiplied by 100 gives 50% or a gain of +50%.
Using a percentage calculator
If the investor is dealing with much bigger and more complicated figures, and/or wants to save time and effort, then Finbold’s percentage calculator can come in handy. This calculator only requires the user to input the values (purchase and selling price), and the result (loss or gain) of their Bitcoin investment is available immediately.
Bitcoin price analysis
Meanwhile, those investors who purchased Bitcoin one month ago and sold it today would be recording a gain of 32.92%, as the maiden crypto was at press time trading at $22,855. Its current price also represents a decline of 0.12% on the day but still an increase of 7.93% on its weekly chart.
At the same time, the flagship decentralized finance (DeFi) token has a market capitalization of $440.22 billion, which ranks it as the largest crypto asset by this indicator, according to the CoinMarketCapdata retrieved by Finbold on January 24.