How can one calculate the realized gain and unrealized gain when trading cryptocurrencies?

3 answers

• SumanaDec 18, 2023 · 2 years ago
  Sure! Calculating the realized gain and unrealized gain when trading cryptocurrencies can be a bit tricky, but I'll try to explain it in a simple way. Realized gain is the profit you make when you sell a cryptocurrency. It's calculated by subtracting the cost basis (the price you bought the cryptocurrency for) from the selling price. For example, if you bought Bitcoin for $10,000 and sold it for $15,000, your realized gain would be $5,000. On the other hand, unrealized gain is the profit you would make if you were to sell your cryptocurrency at the current market price. It's calculated by subtracting the cost basis from the current market price. So, if the current market price of Bitcoin is $20,000, your unrealized gain would be $10,000. Keep in mind that unrealized gain is not realized until you actually sell the cryptocurrency. I hope this helps!
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• Ali MamloukSep 04, 2021 · 4 years ago
  Calculating the realized gain and unrealized gain when trading cryptocurrencies can be a bit confusing, but I'll break it down for you. Realized gain is the profit you make when you sell a cryptocurrency. To calculate it, subtract the cost basis (the price you bought the cryptocurrency for) from the selling price. For example, if you bought Ethereum for $500 and sold it for $1,000, your realized gain would be $500. On the other hand, unrealized gain is the profit you would make if you were to sell your cryptocurrency at the current market price. To calculate it, subtract the cost basis from the current market price. So, if the current market price of Ethereum is $1,500, your unrealized gain would be $1,000. Remember, unrealized gain is not realized until you actually sell the cryptocurrency. I hope this clears things up!
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• swathi illuruOct 26, 2020 · 5 years ago
  Calculating the realized gain and unrealized gain when trading cryptocurrencies is an important aspect of managing your investments. Realized gain refers to the profit you make when you sell a cryptocurrency, while unrealized gain is the potential profit you could make if you were to sell your cryptocurrency at the current market price. To calculate the realized gain, subtract the cost basis (the price you bought the cryptocurrency for) from the selling price. For example, if you bought Litecoin for $100 and sold it for $150, your realized gain would be $50. On the other hand, to calculate the unrealized gain, subtract the cost basis from the current market price. So, if the current market price of Litecoin is $200, your unrealized gain would be $100. It's important to note that unrealized gain is not realized until you actually sell the cryptocurrency. I hope this explanation helps you understand the concept better!
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