ROI vs annualized ROI
Return on investment (ROI) is the profit divided by the money you put in. It ignores time: 58% in three months and 58% in three years show the same ROI, yet they are very different results. The annualized return โ the compound annual growth rate, CAGR โ converts any period into an equivalent yearly rate, so a three-month trade and a three-year hold can be compared on the same scale.
The simple annual rate is shown too because many platforms quote it: it scales ROI linearly by days without compounding. For periods shorter than a year, CAGR can look extreme โ doubling in one month annualizes to more than 400,000% โ so read annualized figures for short holds as an illustration, not a forecast.
cost = invested + fees
ROI = (final value โ cost) รท cost ร 100
multiple = final value รท cost
CAGR = multiple^(365 รท days) โ 1
simple rate = ROI ร 365 รท daysExample: $1,000 of ETH
You bought $1,000 of ETH at $2,500 on 15 January 2025, paid $15 in fees, and value the position on 1 October 2026 with ETH at $4,000. You hold 0.4 ETH worth $1,600. Against a total cost of $1,015 that is a profit of $585, ROI 57.6%, a 1.58ร multiple. The holding period is 624 days, so the annualized return is about 30.5% a year; the simple annual rate is 33.7%.
Compared with a 5% benchmark โ roughly what a conservative stablecoin yield might have paid โ the same $1,015 would have grown to about $1,103. ETH beat it by about $497. Whether that was worth the volatility along the way is a separate question the number cannot answer.
Getting the inputs right
- Use the full cost: trading or swap fees, network fees for deposits and withdrawals.
- If you bought in several steps, use your average buy price (our average price calculator does it) and the total amount invested.
- Use the date of the first purchase for a rough CAGR; for many purchases, the DCA calculator models each one.
- For a closed position, enter the sell price and the sale date; for an open one, todayโs price and date.
- Pick a benchmark that matches the risk you could have taken instead: a stablecoin yield, Bitcoin itself, or zero.
Common ROI mistakes
Counting only winners. If you sold some coins at a loss along the way, your portfolio ROI is lower than the ROI of the coin you still hold. The portfolio tracker and tax-lot calculator help see the whole picture.
Ignoring inflation and the alternative. A 10% return over three years is a loss in real terms if inflation was higher, and a poor result if a riskless option paid more. The benchmark field exists for exactly this.
Mixing currencies. ROI measured in USD and ROI measured in BTC are different numbers. An altcoin can be up 20% in dollars and down 30% against Bitcoin over the same period โ both are true.
Frequently asked questions
+How do I calculate ROI on crypto?
Subtract the total cost (investment plus fees) from the current or sale value, divide by the total cost and multiply by 100. The calculator also annualizes the result.
+What is a good ROI for crypto?
There is no universal number. Compare the annualized return with what you could have earned with less risk โ for example a stablecoin yield or simply holding Bitcoin โ over the same period.
+Why is my annualized return so high for a short trade?
Annualizing assumes the same growth repeats every period for a year. For trades of days or weeks this explodes mathematically; use ROI for short trades and CAGR for holds of a year or longer.
+Does the calculator include fees?
Yes. Fees are added to the cost, so the ROI is net of trading and network costs.
+Can I calculate ROI in BTC instead of USD?
Yes โ enter all values in BTC instead of dollars. The math is identical; only the unit changes.
Calculations run entirely in your browser; nothing you type is sent to KOT.CASH. Results are estimates for information only and are not financial, tax or legal advice.