What is ROI

Crypto for Advanced
> 3 min. read
What is ROI

ROI is the ratio of net profit over the total cost of the investment.

ROI or Return On Investment is a comparison between an investment's monetary value and its cost. (Profit minus cost) / cost is the ROI formula. Your return on investment (ROI) would be 0.9, or 90%, if you made $10,000 from a $1,000 investment. An investing calculator is also a good way to get this information. Return on investment (ROI) can be used to evaluate the prospective profitability of a certain investment, your marketing initiatives (for marketing accountability), or when formulating business strategies to start your company. A related statistic is return on ad spend (ROAS), however it focuses on specific methods, such as a single marketing campaign to develop your firm.

Formula for the ROI is following:

ROI = (Net profit / investment) x 100

You multiply with 100 in the end if you want percentage, if you want just the ratio, then you do the calculation without multiplying.

When it comes to determining the advantages and financial returns on your investment, ROI is most beneficial when it refers to something solid and measurable. The most common technique of analysing investments is in terms of monetary cost because it is the easiest to measure, but it is also possible to compute ROI using time as an investment. Return on equity, return on ad expenditure, return on assets, social return on investment, and other sorts of investments and sectors use the ROI statistic or figure.

Example of calculating ROI on crypto investment:

Let’s say you find a cryptocurrency that you really like, and you think it will perform well. The price of X coin is 10 USD. You decide to buy 100 coins, meaning you invest 1000 USD. Over the time the price of the X coin went up for 20 USD, which makes you satisfied and you decide to sell the 100 coins at the price of 30 USD per X coin. Your profit therefore is 3000 USD, but the net profit is 2000 USD (you took away the initial investment). The calculation for this example is as follows:

ROI of investment in X coin = (2000 USD / 1000 USD) x 100 = 200%

Based on the calculation, the ROI of mention investment was in the ratio of 2, or 200%.

The calculation of ROI is very important in business as well as investing because it helps you to calculate and stay on the profitable way. One should also want to see from which investments he had the most profit.

© 2023 BITmarkets. All rights reserved.
Dark mode
Light mode

🍪 Cookies

We use cookies to store, access and process personal data to give you the best online experience. By clicking Accept Cookies you consent to storing all cookies and ensure best website performance. You can modify cookie preferences or withdraw consent by clicking Cookie Settings. To find out more about cookies and purposes, read our Cookie Policy and Privacy Policy

Cookies settings

Cookie Control

What are cookies?

Cookies are small text files that enable us, and our service provides to uniquely identify your browser or device. Cookies normally work by assigning a unique number to your device and are stored on your browser by the websites that you visit as well as third-party service providers for those website. By the term cookies other technologies as SDKs, pixels and local storage are to be considered.

If Enabled

We may recognize you as a customer which enables customized services, content and advertising, services effectiveness and device recognition for enhanced security
We may improve your experience based on your previous session
We can keep track of your preferences and personalize services
We can improve the performance of Website.

If Disabled

We won't be able to remember your previous sessions, that won't allow us to tailor the website according to your preferences
Some features might not be available and user experience reduced without cookies

Strictly necessary means that essential functions of the Website can not be provided without using them. Because these cookies are essential for the properly working and secure of Website features and services, you cannot opt-out of using these technologies. You can still block them within your browser, but it might cause the disfunction of basic website features.

  • Setting privacy preferences
  • Secure log in
  • Secure connection during the usage of services
  • Filling forms

Analytics and performance tracking technologies to analyze how you use the Website.

  • Most viewed pages
  • Interaction with content
  • Error analysis
  • Testing and Measuring various design effectivity

The Website may use third-party advertising and marketing technologies.

  • Promote our services on other platforms and websites
  • Measure the effectiveness of our campaigns

Manage Cookies

Crypto assets as unregulated, decentralised and highly volatile assets entail substantial risks and you may lose all invested capital.

Check Risk Disclosure for detail risk information.