Knowing how to calculate your return on investment is excellent for making a good Bitcoin investment. Bitcoin is a lucrative and profitable investment; hence can generate an excellent ROI for its investors. Most of these digital money investors are interested in learning about the return on investment in the digital market. However, these virtual money investors need clarification about the value of this digital asset. This electronic currency is highly volatile hence an excellent opportunity to maximize your return on investment.
When calculating your ROI, you will need a spreadsheet such as Google Sheets or Excel. The formula for ROI is straightforward: current price average price/ total cost. In other words, if you invest $200 in this electronic money and it appreciates to $ 250, you will earn a 50% ROI. Therefore, get a reliable platform like Bitcoin Evolution to trade this electronic currency and maximize your trading gains.
On the other hand, it would be best to remember that ROI is a relative term and can change with time. It takes work to make a reliable long-term investment decision in the Bitcoin market. Moreover, people calculate the return on investment as a percentage, and positive values indicate a profit, while on the other hand, negative values indicate a loss. Investors calculate the return on investment by deducting total costs from total returns. Moreover, full returns refer to dividends that share the value when selling. Also, the selling price is the only determining factor for this digital money. Moreover, total cost refers to the total costs of the asset, including the initial purchase price and many other additional costs.
How to Calculate Your ROI
Calculating your return on investments requires several steps. First, investors should consider their risk tolerance. So, you should opt for a lower ROI if you have a low-risk tolerance. Conversely, those who want to reap higher Bitcoin profits; should select an option with a higher ROI. Also, these digital money investors should take into account that this virtual currency is a speculative asset. Therefore, reducing the original price of this virtual currency is essential when calculating your return on investment. The cost of acquisition should divide by the cost of production.
This electronic asset is a high-risk investment but also a lucrative investment. Therefore, investors should research accordingly about this electronic currency. It would help if you learned about when is the right time to open a position when investing in this digital asset. It may seem tempting to support this digital money when the price is low. However, there is no need to rush to invest in this electronic currency. Additionally, this digital currency is highly volatile; hence you must avoid trying to time this volatile market.
On the other hand, this virtual money returns are very substantial. This electronic currency, the largest cryptocurrency by market capitalization, can outperform the traditional stock market and market commodities. The risk associated with investing in this virtual currency is minimal compared to the number of returns you will get.
This virtual money return on investment is an effective barometer of the success of this electronic money project. However, it is essential to know the limitations of the return on investments. If you are new to investing in this electronic currency, you will come across several platforms where you can trade. On the other hand, simple ROI calculations cannot tell you precisely how much you will earn if you don’t consider transaction, deposit, and conversion fees.
The Bottom Line
To get a positive return on your Bitcoin investment, you need to purchase this virtual currency at a low price and sell it when it increases. Therefore, it does not take too long to collect your ROI if you time your purchase.