How to Calculate Profit Investing or Trading Bitcoin?

Bitcoin Questions and AnswersHow to Calculate Profit Investing or Trading Bitcoin?

Floyd R asked 6 months ago

I am new to Bitcoin and would like to know how to calculate the amount of profit made when Bitcoin rises. With stocks a point is equal to $1 and I am required to pay the full value of the stock so calculating profit when the stock rises is very easy. Right now, 1 Bitcoin is worth $11059.51 however I am allowed to invest less money for a small piece of it. I can invest $100, $500, or any amount less than what Bitcoin is worth. I am confused on how to calculate profit. If Bitcoin rises and to $20000.00, and I have only invested $100, how much profit will I make? Is there any easy way to calculate the actual profit of Bitcoin rising when someone invests in a small piece of it rather than buying 1 Bitcoin? Thanks for your help.

1 Answers
Steven Hay answered 6 months ago

Hi Floyd,

Well, there are apps which allow you to record your purchase prices and volumes, and automatically calculate your profit or loss from there. However, as these apps probably leak your data, they’re not the best for privacy reasons, unless you run them on an offline device.

Why don’t you try using a spreadsheet? It’s fairly straightforward to calculate this sort of thing.

For your example of buying $100 at the current price ($11,600) then record the following data:

buying price ($11,600)
volume bought (this should be around 0.00862069 BTC or $100 / $11,600 but note that the final sum will vary due to the addition of trading costs, etc.)

Anyway, if price then goes to $20000, you can calculate your profit as follows: 0.00862069 (volume bought) * 20000 (current price) – $100 (initial buying price). $72 profit, in other words…

Granted, this is a little complicated if you perform multiple buys and sells, in which case it probably makes sense to use a portfolio tracking app. I see Blockfolio recommended frequently but do keep in mind the privacy concerns.

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