How to Calculate Crypto Profit
The basic formula for calculating crypto profit or loss is straightforward:
Profit = (Sell Price × Quantity) − (Buy Price × Quantity) − Total Fees
ROI % = (Profit ÷ Total Cost) × 100
Example: You bought 0.5 Bitcoin at $40,000 ($20,000 total) and sold at $65,000 ($32,500 total). Exchange fee was $50 buy, $65 sell.
- Gross profit: $32,500 − $20,000 = $12,500
- Net profit after fees: $12,500 − $115 = $12,385
- ROI: $12,385 ÷ $20,050 × 100 = 61.8%
How Exchange Fees Eat Into Your Profit
Exchange fees seem small but compound significantly on large trades. Most exchanges charge 0.1–0.5% per trade:
| Exchange | Maker Fee | Taker Fee | Fee on $10,000 Trade |
|---|---|---|---|
| Binance | 0.10% | 0.10% | $10 |
| Coinbase Advanced | 0.40% | 0.60% | $60 |
| Kraken | 0.25% | 0.40% | $40 |
| Bybit | 0.10% | 0.10% | $10 |
| Coinbase Basic | 1.49% flat | $149 | |
On a $10,000 round trip (buy + sell), Binance costs $20 total vs Coinbase Basic's $298. Always factor fees into your profit calculation.
Crypto Capital Gains Tax — United States 2026
In the US, the IRS treats cryptocurrency as property. Every sale, trade or spend is a taxable event:
| Holding Period | Tax Type | Tax Rate (2026) |
|---|---|---|
| Under 1 year | Short-term capital gains | Ordinary income rate (10%–37%) |
| Over 1 year | Long-term capital gains | 0%, 15% or 20% |
Holding Bitcoin or any crypto for over 12 months before selling can dramatically reduce your tax bill. A $50,000 gain taxed at short-term rates (37%) costs $18,500 in federal tax. The same gain at long-term rates (20%) costs only $10,000 — a $8,500 saving.
Crypto Capital Gains Tax — United Kingdom 2026
HMRC treats crypto as a capital asset. The annual CGT allowance for 2026/27 is £3,000. Gains above this are taxed at:
- Basic rate taxpayers: 18% on crypto gains
- Higher rate taxpayers: 24% on crypto gains
The UK uses the Section 104 pooling rule — you calculate your average cost basis across all purchases of the same coin rather than using FIFO or LIFO.
Crypto Tax Across Europe
| Country | Tax Rate | Notes |
|---|---|---|
| Germany | 0% | Tax-free if held 1+ year |
| Portugal | 0% (short-term trades now taxed) | 28% on short-term gains since 2023 |
| Netherlands | 31% | Box 3 wealth tax on deemed return |
| France | 30% | Flat 30% PFU on gains |
| Spain | 19%–28% | Progressive CGT rates |
| Italy | 26% | Gains above €2,000/year |
Calculate Your Exact Crypto Profit & Tax
Enter your buy price, sell price, fees and tax rate. Get instant profit, ROI and tax owed.
Use Free Crypto Calculator →Dollar Cost Averaging — Reduce Your Average Buy Price
Dollar Cost Averaging (DCA) means buying a fixed dollar amount of crypto at regular intervals regardless of price. It eliminates the need to time the market and naturally lowers your average cost during downturns.
Example: Buying $500 of Bitcoin monthly for 6 months at prices $40k, $35k, $30k, $45k, $50k, $42k:
- Total invested: $3,000
- Total BTC acquired: 0.0125 + 0.0143 + 0.0167 + 0.0111 + 0.0100 + 0.0119 = 0.0765 BTC
- Average buy price: $3,000 ÷ 0.0765 = $39,216/BTC
- Lump sum at $40k would have bought only 0.075 BTC — DCA got you more
Frequently Asked Questions
Do I pay tax if I trade one crypto for another?
Yes — in the US, UK and most European countries, swapping one cryptocurrency for another (e.g. Bitcoin for Ethereum) is a taxable disposal. You calculate the gain/loss based on the GBP or USD value at the time of the trade. This catches many traders off guard who think they only owe tax when converting to fiat.
What if I made a crypto loss? Can I claim it?
Yes. In the US, crypto losses can offset capital gains, and up to $3,000 in net losses can be deducted against ordinary income per year. Excess losses carry forward to future tax years. In the UK, losses can be offset against gains in the same year or carried forward indefinitely.
Is crypto legal in Europe and the US?
Yes — cryptocurrency is legal in the US, UK and all EU member states. The EU's MiCA (Markets in Crypto-Assets) regulation provides a unified framework. The US regulates crypto through the SEC and CFTC. Always use regulated exchanges and report gains to your tax authority.