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The Forbes Advisor bitcoin profit calculator will tell you the value of your bitcoin investment in U.S. dollars and estimate your potential profit or loss.
The calculator lets you enter your total crypto investment holdings alongside the trading and exit fees associated with buying and selling your BTC, giving you a clear picture of the health of your portfolio.
Bitcoin Profit Calculator: Our Assumptions
This calculator uses the current market price of bitcoin to estimate your rate of return over a set period.
Listed below are the assumptions made in the Forbes Advisor bitcoin profit calculator:
- Bitcoin buy price: The price at which you purchased bitcoin, excluding fees.
- Bitcoin sell price: The price at which you sold bitcoin before fees.
- Investment amount: The total amount of bitcoin purchased in U.S. dollars. Our calculator defaults to a value of $100 unless you enter a custom amount.
- Investment fees: It’s common for crypto exchanges and crypto brokers to charge fees on transactions. Trading fees on the original transaction should also be included for maximum accuracy. Such fees can be a fixed percentage of the trade or can typically depend on whether the investor is a maker (buyer) or taker (seller). Other fees may also be included (some crypto exchanges levy additional charges, such as a convenience fee).
- Withdrawal fees: Some platforms charge a fee for withdrawing your bitcoin.
- Profit/loss: This is the return on the trade. If a profit is made, you might be on the hook for capital gains tax.
- Total investment amount: This is the total dollar amount of the transaction, inclusive of all fees as entered in the “investment fees” section.
- Total exit amount: The final amount received after selling, inclusive of fees. Taxes are not factored into this total.
How Can I Profit from Bitcoin?
Few mainstream financial assets are as volatile as cryptocurrency, with drops and gains of 5% or more in a day not unheard of. The world’s biggest cryptocurrency hit an all-time high of $111,970 as of May 22, 2025.
If your timing is right, there are sizable profits to be made. For example, if you bought bitcoin on January 1, 2024, for around $42,280 and sold at its peak price, you would have pocketed over a 160% gain.
Bitcoin Gains
BTC is similar to other speculative assets in that investor sentiment rises based on news cycles and “fear of missing out.” President Donald Trump’s announcement of establishing a “U.S. Crypto Reserve” of bitcoin, ethereum and other leading digital crypto coins created a tailwind for BTC prices.
Trump wrote on Truth Social on March 2, “A U.S. Crypto Reserve will elevate this critical industry.”
Prices soared by nearly 10% only to lose steam a few days later with a “sell the news,” profit-taking reaction.
Bitcoin Crashes
Despite bitcoin’s meteoric rise in 2025, the value of bitcoin has dropped 8% or more on a few occasions. For instance, geopolitical concerns in the Middle East in June sent bitcoin crashing below its newfound threshold of $100,000 with around an 8% loss in 48 hours.
The original crypto also plunged nearly 9% of its value on March 4 when rapid selling triggered a liquidation spree; the sell-off coincided with a U.S. equity pullback.
Does the IRS Tax Bitcoin Profits?
In the U.S., profits from selling bitcoin trigger capital gains.
“Think of bitcoin as more like digital property rather than digital cash, which in the eyes of the IRS is treated as such, meaning it’s taxed like an investment. Bitcoin will be tied to an IRS tax if it is sold, traded or switched for another cryptocurrency,” says Hector Castaneda, a certified public accountant and principal at Castaneda CPA and Associates.
In fact, the IRS includes a specific question on the Form 1040: “At any time during (year), did you: (a) receive (as a reward, award or payment for property or services); or (b) sell, exchange or otherwise dispose of a digital asset (or a financial interest in a digital asset).”
While the question has appeared on tax forms since 2019, the IRS changed the wording from “virtual currencies” to “digital assets” for the 2022 tax year to broaden the scope. So it now encompasses stablecoins and non-fungible tokens.
In the U.S., bitcoin is treated as property for tax purposes, not as currency. This means that each time bitcoin is sold, exchanged or used to purchase goods/services, it triggers a taxable event. Investors are required to report capital gains or losses based on the difference between their purchase price [cost basis] and the value at the time of disposition.
– Kendale King, a California-based CPA and CEO of KCK CPA, which provides crypto-specific financial accounting services.
Failing to report digital assets on your tax return can result in penalties or fines.
“The taxes are still real even when they are digital. Know the regulations and maintain accurate records. What you don’t report can cost you,” Castaneda says.
Cryptocurrency Capital Gains
If you held your bitcoin for less than a year, the capital gains will be taxed as short term. Anything held for more than a year is taxed as long-term capital gains. The tax rate for long-term capital gains is more favorable than short term, with rates from 0% to 20%. Short-term gains are taxed as your ordinary income at 10% to 37%.
Cryptocurrency Losses
Bitcoin losses can also work in your favor at tax time, helping you lower your tax bill. If you sell your bitcoin at a loss, that loss can be used to offset capital gains and even reduce your taxable income by up to $3,000 per year. That figure goes down to $1,500 annually if you’re married and filing separately.
Losses in crypto can also be used to offset capital gains in stocks or other equities.
To simplify the math, consider using our cryptocurrency tax calculator. It can help you generate estimated gains and losses on your taxable income.