How to calculate crypto profit
Crypto profit has two layers: the gross number your exchange shows you, and the net number that hits your bank account after fees and taxes. Most calculators only give you the first one. This tool gives you both.
The formula: Net Profit = (Sell Price × Quantity − Sell Fee) − (Buy Price × Quantity + Buy Fee). The buy fee increases your cost basis. The sell fee reduces your proceeds. Both reduce your taxable gain.
ROI is always calculated against your total cash out of pocket — the purchase price plus the buy fee — not against the raw coin price. A $50 exchange fee on a $10,000 position reduces your effective ROI from 100% to 99.5% at a 2x sale. On smaller positions the fee impact is more pronounced.
Short-term vs long-term crypto gains
The IRS taxes cryptocurrency as property, which means the capital gains rules that apply to stocks apply to crypto — including the holding period distinction. Hold for 12 months or less and your gain is short-term, taxed at ordinary income rates up to 37%. Hold for more than 12 months and your gain is long-term, taxed at 0%, 15%, or 20% depending on your total income.
For a single filer earning $120,000 in wages, a $30,000 crypto profit looks like this: short-term adds to ordinary income, pushing the marginal rate to 24% — so $7,200 in federal tax. Long-term keeps the $30,000 separate, taxed at 15% — $4,500. The 12-month mark saves $2,700 on that one trade. On larger positions the spread widens significantly.
High earners above $200,000 (single) or $250,000 (married) also owe the 3.8% Net Investment Income Tax on top of the capital gains rate. Use the crypto gains tax calculator for the full multi-position breakdown.
What the break-even price tells you
Your break-even price is the floor below which selling destroys capital. It accounts for the buy fee you already paid (sunk cost that raised your effective purchase price) and the sell fee you will pay (which reduces your net proceeds). Selling below break-even locks in a loss even if the sell price is higher than your original buy price — unusual with small fee percentages but possible on high-volume trades with premium exchange fees.
The break-even is also useful for setting limit orders. If your position cost $29,985 all-in (purchase + buy fee) and your exchange charges a 0.1% sell fee, setting a limit order at exactly $29,985 will net you slightly less than break-even. You need to add the estimated sell fee to the break-even price to truly recover your capital. This calculator does that automatically.
How trading fees affect your real return
Exchange fees look small in percentage terms but compound meaningfully over multiple trades. A round-trip trade with 0.1% buy and 0.1% sell fees costs 0.2% of position size per trade. Running 50 trades per year on a $50,000 portfolio means $5,000 in annual fee drag — before any taxes. That is 10% of capital gone purely to friction.
Fee types to track: maker/taker fees charged as a percentage of trade size, flat withdrawal fees, gas fees on Ethereum and other chains (these count as transaction costs that can increase your cost basis), and spread on market orders. Always include fees on both sides of a trade when calculating true ROI.
Crypto profit FAQ
Is profit from crypto taxed as capital gains or income?
It depends on how you acquired it. Profit from buying and selling crypto is capital gains. Crypto received as payment for services, from mining, staking rewards, or airdrops is ordinary income — taxed at your full income rate when you receive it, regardless of whether you sell. Subsequent appreciation on that income-taxed crypto is then a capital gain when you eventually sell.
What counts as a taxable event?
Selling crypto for USD, trading one crypto for another (BTC to ETH is a taxable event at the fair market value of what you received), using crypto to buy goods or services, and receiving crypto as income. Simply buying crypto or moving it between your own wallets is not taxable.
Can I deduct crypto losses?
Yes. Realized crypto losses offset capital gains first. If your losses exceed your gains, up to $3,000 of net capital losses can offset ordinary income per year. Additional losses carry forward to future years. Unlike stocks, crypto is not subject to the wash sale rule as of 2026 — meaning you can sell at a loss and immediately rebuy the same asset.
How do I track my cost basis across multiple buys?
The IRS allows several cost basis methods: FIFO (first in, first out — the default), LIFO (last in, first out), HIFO (highest in, first out — minimizes taxable gain), and specific identification. HIFO almost always produces the lowest tax bill. To use any method other than FIFO you need detailed records of each purchase. Tools like Koinly auto-track basis across 350+ exchanges.