How to Calculate Bitcoin ROI (Step by Step)

This tutorial walks you through calculating Bitcoin ROI from first principles and extending it to breakeven analysis, annualized return (CAGR), and DCA scenarios.

1) Gather Inputs

• Entry price(s) and quantity
• Exit price or current price
• Fees (trading, spreads), and taxes if applicable
• Time held (in years) for annualization

2) Core Formulas

• Simple ROI = (Final Value − Initial Cost) ÷ Initial Cost
• Final Value = Quantity × ExitPrice − Fees
• Initial Cost = Quantity × EntryPrice + Fees
• Breakeven Price ≈ (Initial Cost + FeesToExit) ÷ Quantity
• CAGR ≈ (Final Value ÷ Initial Cost)^(1/years) − 1

3) Worked Example

• Buy 0.5 BTC at $30,000; fee 0.1% each side
• Current price $60,000; holding period 2.0 years
• Approx Initial Cost ≈ 0.5×30,000×(1+0.001) = $15,015
• Final Value ≈ 0.5×60,000×(1−0.001) = $29,970
• ROI ≈ (29,970 − 15,015) ÷ 15,015 ≈ 99.6%
• CAGR ≈ (29,970 ÷ 15,015)^(1/2) − 1 ≈ 41.6%

4) DCA Considerations

• Weighted average cost = Σ(Qi×Pi)/ΣQi
• Apply fees to each leg
• Use time-weighted analysis for cash flows if comparing strategies

5) Practical Tips

• Track fee drag and slippage explicitly.
• Use conservative assumptions for taxes.
• Stress-test with drawdowns (−30%, −50%, −70%).

For instant calculations tailored to Bitcoin, visit BitcoinROIcalculator.com. This is educational content, not financial advice.