Calculation of ROI in cryptocurrency investments

The world of cryptocurrencies was a hot topic for many investors and passionate. As the increasing popularity of different cryptocurrencies, blockchain technology and digital funds increase, it is not surprising that people want to take action.

However, placing in cryptocurrency can be very volatile and can contain significant risks. The return of the invested capital (ROI) is crucial as such for information based on information based on encryption currency. In this article, we explore the basic elements of the ROI calculation of cryptocurrency investments and we offer you a comprehensive guide to make it more efficient.

What is ROI?

The profitability of the investment refers to the total yield obtained from the investment or to profit for a certain period of time. It is calculated by reducing the value of the initial investments from the total value of the assets at the end of the investment period, when it was reduced during the respective period of taxes and taxes.

For example, if you have invested $ 10,000 in Bitcoin (BTC) at an annual interest rate of 20%for two years, the profitability of the invested capital would be:

10,000 USD (initial investment) – $ 2,000 (Interest won) = $ 8,000 (total value at the end of two years)

Calculation of ROI in cryptocurrency investments

To calculate ROI, you must monitor the performance of your cryptocurrency investments in a certain period of time. This can be done using a variety of tools and platforms that provide real market information such as:

• Exchange information : Web sites such as Coinmarketcap, Coindesk and Cryptoslate provides detailed information about cryptocurrency prices, trading volumes and market value.

• Following wallets and software : applications such as blockfolio, binance’s trade manager and crypto.com offer real price control and portfolio analysis.

• News and analyzes of cryptocurrency : web sites such as Cointegraph, Coindesk and Kryptoslate offers complete coverage of Cryptocurrency market development.

When calculating ROI, you need to consider the following factors:

• Initial investments : The amount of money invested in cryptocurrency.

• Plăți și recompense : Toate taxele rezultate din înlocuirea sau transferul turnării de criptare, cum ar fi taxele de tranzacționare sau taxele de gaz pentru tranzacții.

• Interest won : If the investment wins interest or dividends, calculate these income.

ROI Calculation Formula

To calculate ROI, use the following formula:

ROI = (total value – initial investment) / initial investment

For example, we assume that you have invested $ 10,000 in Bitcoin at an annual annual rate for two years. After one year, your investment is worth $ 12,000.

ROI = ($ 12,000 – $ 10,000) / $ 10,000

= $ 2,000 / $ 10,000

= 20%

Types of Calculation ROI

ROI calculations must be considered:

• Long -term ROI : This type of calculation assumes that the investment will be held for a long time.

• short -term ROI : This type of calculation assumes that the investment will be replaced or sold in a short period of time, such as a year.

• Total value at the end of the period (TVP) : This type of calculation assumes that the total value of all funds at the end of a certain period.

Best ROI Practices to calculate **

Ensuring accuracy and correctness in Calculation of ROI:

• Use reliable sources of information

  

  : Make sure that the information you use is accurate, up -to -go and purchasing reliable suppliers.

2

• Consider several scenarios : Use different scenarios to test the durability of ROI calculation and identify potential risks.

Create Create Ethereum