Which currency (crypto & fiat) to use to measure profits?

Question

Lets say you have added enough USD to trade with so you pick BTC to trade altcoins with.

• You buy Altcoin X for let's say order total 0.5 BTC
• BTC goes up in value but Altcoin X in USD has jumped big time in value
• In BTC terms you have lost as BTC's value increase is more than Altcoin X
• You sell Altcoin X but you get less BTC, in USD terms you happy, profit both up
• BTC drops in value to the USD, you got less than you started with now what?

Do you ignore the USD value and measure only in BTC to get your base currency/crypto currency to use for measuring profits trading Altcoins?

I just cannot get my head around it. Any advice and help/direction will be appreciated.

Answer 1

Companies measure their profits in currencies in which they keep the accounting. In my opinion regular people should measure profits in currency which they earn and/or spend. Therefore you should ask yourself: Do you spend BTC? Do you spend USD? You should measure profits in currency you can relate to in terms earning/spending money.

Answer 2

If you are measuring your Bitcoin or Altcoin price when trading from a certain fiat, say USD. Your profits will always have two measurements. How much the coin cost in fiat will always fluctuate with the cryptocurrencies change in value.This will reflect as less than what your purchase/trading price was, or it will reflect as more than what you have paid. So no matter what if you see a rise in price of a crypto coin you purchased, to calculate your profits in USD- or the fiat currency you are used to referencing will show your profits or loses. If you look at the value of the cryptocurrency you purchased you can track the coins state of value on the market in comparison to how much it was valued at when you purchased it. If the value went up for that coin you can know that your profits in USD is reflective.