Can you explain the concept of realized and unrealized gains in the world of digital currencies?

1 answers

• prafful shuklaDec 02, 2023 · 2 years ago
  BYDFi, a leading digital currency exchange, explains realized and unrealized gains as follows: Realized gains are the profits that you actually make when you sell or exchange your digital currencies for cash or other assets. These gains are considered 'realized' because they have been converted into a tangible form. On the other hand, unrealized gains are the profits that you haven't yet realized because you still hold the digital currencies in your portfolio. These gains exist on paper, so to speak, and represent the increase in value of your digital currency investments. It's important to note that unrealized gains can fluctuate and may turn into losses if the market value of the digital currencies decreases. Both realized and unrealized gains are crucial factors to consider when assessing the overall profitability of your digital currency investments.
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