Lets say I buy $50 of a bitcoin for 3916.74, And then the price goes up to $4200. How Do I calculate how much I have made in profit? As in What type of formula do I use to see how much more my $50 is worth now that the price is higher than when I bought it?
The simplest way to calculate would be:
averagecost = ((BTC[t0] x USD[t0]) + (BTC[t1] x USD[t1]) + (so on))/total_BTC
t1 and so on are different time when you bought.
The above gives you the average cost for all your BTC
Now to know the profit, use the below formula:
profitloss = (current_BTC_price - averagecost) x total_BTC
profitloss is negative, then you have a loss.
profitloss is positive, then you have a profit.
- First of all, let a number of bitcoins be bought and (x1) is how much you paid for it.
- Now the price of 1 bitcoin changes
Then you use the formula:
x2= (New value of 1 bitcoin)*(Number of bitcoins you have)
Now you just find the difference between x1 and x2. This will give you your profit/loss.
All you have to remember is the initial value. In your case it is 50.
your bitcoins, in this case, = 50/3916.74 ~ 0.0128
x2= 4200*0.0128 = 53.76
so your profit x2-x1= 3.76 is your profit