Bybit Launchpool is an asset issuance platform that allows users to stake various cryptocurrencies to earn new project tokens without any fees. Learn more here.

Cryptocurrency enthusiasts are always on the lookout for innovative ways to grow their investments, and Bybit Launchpool offers just that. Imagine 

 your favorite tokens to earn new, promising project tokens with no fees involved! With its user-friendly platform, competitive yields and enhanced liquidity, Bybit Launchpool is transforming the way investors engage with emerging cryptocurrencies. This comprehensive guide will provide you with everything you need to know about maximizing your earnings through Bybit Launchpool. 

 is an innovative asset issuance platform that enables users to discover quality crypto assets. By staking your cryptocurrency, you gain direct access to new tokens from vetted, emerging projects, providing a unique opportunity to engage with new projects. 

To begin using Bybit Launchpool, you must first create an account on Bybit and select from the available pools to stake. Once you’ve staked your funds, your daily Launchpool yield will automatically be calculated based on the proportion of your average staked amount relative to the total staked amount of all users. After the system calculates the daily average staked amount for all participants, rewards will be distributed to your Funding Account within a few hours after midnight (12AM UTC) each day.

To calculate your daily yield, use the following formula (where β refers to the Launchpool reward): 

Daily β yield = (Your average daily staked amount in the pool / total staked amount of all participants in the pool) × daily β reward pool

Note that you'll only receive a payout if your yield equals or exceeds 0.01 USDT equivalent.

Bybit Launchpool has introduced several enhancements that improve user experience and increase earning potential.

The new Bybit Launchpool allows you to stake an increased variety of tokens, providing multiple opportunities to earn rewards. Participants can select from different projects and pools, enabling them to diversify their staking strategies and maximize their potential returns. This flexibility encourages broader participation and engagement with emerging cryptocurrency projects.

Another key upgrade is the chance to earn higher yields. By staking tokens in the Launchpool, users can acquire new tokens before they officially hit the market. This early access provides the potential to profit from price gains as demand for these tokens usually grows after listing, offering an edge over traditional trading.

The updated mechanism for reward distribution allows users to more quickly receive their earnings. Instead of waiting for days to receive their yields, users now receive their rewards within just a few hours after the daily calculation period. This faster payout system enhances liquidity and makes it easier for participants to reinvest or use their earnings sooner, adding convenience to the overall experience.

Bybit Launchpool offers a range of benefits for users looking to grow their crypto investments. By staking tokens, you can earn additional coins — including exposure to new cryptocurrencies — while 

 through daily rewards. The platform’s flexibility allows you to unstake tokens at any time, maintaining liquidity without any fees. 

VIP users on Bybit enjoy higher staking caps and/or estimated APRs as compared to regular users, allowing them to earn more from their staked assets — an appealing benefit for those with larger investments. They also gain priority access to new projects and tokens, which gives them a head start on emerging opportunities before they become widely available. 

Bybit Launchpool makes it easy to stake your cryptocurrencies and earn new tokens. Please note that you’ll need to 

 and complete Identity Verification before you can proceed with Bybit Launchpool. If you don’t already have a Bybit account, you can follow our guide 

Once you’ve created your Bybit account, here’s how to get started with Bybit Launchpool. 

: Log in to your Bybit account and hover your cursor over the 

tab on the navigation bar at the top of the page. Then, hover your cursor over 

: Scroll down to view the available Launchpools. Then, click on 

button of the corresponding Launchpool you would like to participate in.

: Input the amount you would like to stake, read and agree to the terms, and click on 

Congratulations! You’ve successfully staked tokens for a Launchpool project!

To view your staked tokens, simply navigate to the 

Once you’ve earned rewards (worth a minimum of 0.01 USDT equivalent), they’ll be automatically credited to your account daily.

Trading Launchpool Tokens on Bybit Pre-Market

Bybit's Spot Pre-Market Trading product allows users to trade Launchpool-listed tokens before they officially debut on the Spot market. To participate, users must create an account and upgrade to a 

. The trading process involves two key roles: Makers, who place orders at set prices, and Takers, who fulfill these orders completely. Both parties incur transaction fees, and sellers must provide collateral based on each token’s risk. If a seller fails to deliver on time, the buyer receives a portion of the collateral as compensation. This feature not only gives traders early access to new tokens but also aids in determining the market value of each token, enhancing the overall trading experience and offering opportunities for potential profits.

Bybit Launchpool provides an excellent opportunity for cryptocurrency enthusiasts to earn new tokens through staking, with no fees involved. The platform offers competitive APRs, a user-friendly interface and the flexibility to unstake your tokens at any time. With diverse token options and transparent daily yield calculations, Bybit Launchpool caters to both casual and serious investors, making it a valuable tool for anyone looking to engage with emerging projects while generating passive income.

Beginner

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Bybit Launchpool: Everything you need to know (updated 2025)

This article explores Hyperlane’s core features, growing ecosystem, the upcoming HYPER token’s airdrop and HYPER’s tokenomics.

Hyperlane is a permissionless, modular interoperability protocol designed to facilitate secure cross-chain messaging and asset transfers without relying on centralized intermediaries. It empowers developers to build custom bridges and interchain applications with unparalleled flexibility.

Hyperlane is a permissionless interoperability protocol for cross-chain communication across blockchain ecosystems. It allows 

 (DApps) to exchange arbitrary messages and transfer assets across chains seamlessly — without centralized relayers or approvals.

 (ISMs) — part of a modular system that lets developers define the way that cross-chain messages are verified, offering unmatched flexibility. It supports cross-VM communication, including EVM, SVM (Solana), and 

, making it ideal for today’s multichain and modular blockchain environments. 

Hyperlane’s architecture eliminates lock-in and promotes composability, laying the groundwork for a truly interconnected 

Hyperlane was co-founded by Jon Kol, Asa Oines and Nam Chu Hoai, all seasoned innovators with experience at corporations such as Morgan Stanley, Galaxy Digital, Celo and Google. In 2022, the protocol secured $18.5 million in seed funding, led by Variant Fund, with notable participation from Galaxy Ventures, CoinFund, Circle and Figment Capital.

The funding underscored growing institutional confidence in permissionless interoperability infrastructure. Hyperlane hasn’t conducted a public 

, but early community contributors and developers are expected to receive token rewards. 

The project’s approach mirrors LayerZero and Wormhole in incentivizing both users and integrators, with a focus on long-term decentralization.

Launched in August 2024, the Hyperlane Foundation governs the protocol as a 

 (DAO). It manages treasury grants and protocol upgrades, and ensures decentralization in the governance process. 

The foundation also introduced the Hyperlane Alliance, a collective aimed at expanding adoption and standards for intent-based messaging and cross-chain interoperability. 

Governance will be powered by the HYPER token, with voting rights extended to developers and users shaping Hyperlane’s future.

Hyperlane combines security, flexibility and scalability in a single messaging layer.

Hyperlane currently supports over 140 blockchain networks, including Ethereum, Arbitrum, Solana, Celestia, Base and Blast. Its messaging framework is used for:

Hyperlane’s integration with ABC Stack allows sovereign rollups to maintain control, while gaining seamless access to the broader blockchain ecosystem.

Hyperlane’s native token, HYPER, will officially launch on Apr 20, 2025, 

. To claim tokens, users must register by April 13 on the official website.

HYPER will play a central role in the Hyperlane ecosystem, as follows:

Based on official documentation, the total HYPER supply will be allocated as follows:

The community will receive 57%, broken down into 25.5% for expansion rewards, 20% for staking rewards and 11.5% for strategic launch provisions. Meanwhile, 25% will be allocated to core contributors, 10.9% to early backers and 7.1% to the Hyperlane Foundation.

Hyperlane’s distribution strategy prioritizes general message passing (GMP) activity over short-term engagement. To prevent airdrop farming, anti-

 mechanisms assign trust scores based on historical interaction, wallet behavior and transaction quality in order to ensure rewards go to real users who contribute meaningful value to the ecosystem.

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Hyperlane (HYPER): Interoperability protocol connecting over 140 blockchains

In this article, Bybit Learn explores how Mind Network is pioneering fully homomorphic encryption (FHE) tech, what makes FHE different and how you can trade FHE on Bybit Spot.

Imagine a digital world where your data stays encrypted — not just during storage and transfer, but even while it's being processed. No leaks, no vulnerabilities — and no trust required. That's the future Mind Network is building with its 

Mind Network is developing the foundational cryptographic layer for a secure and decentralized internet. By enabling computations on encrypted data, it's solving critical privacy and security challenges across 

 and AI. In this article, Bybit Learn explores how Mind Network is pioneering this tech, what makes FHE different and how you can get involved with the FHE token.

 is an infrastructure project pioneering fully homomorphic encryption (FHE) for web3 and AI. Its mission is to create a fully encrypted internet where data remains private at every stage — from storage and transmission to processing.

The project tackles key challenges in decentralized environments, including data privacy, transaction confidentiality and consensus fairness. With its 

, developed by its team in collaboration with industry partners, Mind Network aims to upgrade the web from hypertext transfer protocol secure (HTTPS) to a fully privacy-first framework.

Mind Network is led by CEO Christian Pusateri, a cryptography advocate and the visionary behind CitizenZ, Mind Network's initiative for digital sovereignty in a 

The project is backed by Binance Labs, Cogitent Ventures, HashKey Capital, Animoca Brands, Chainlink and more, and has 

. Its team has also partnered with Zama Capital to 

 — a production-ready Rust-based FHE library — into real 

The project has earned two Ethereum Foundation research grants, specifically for its FHE innovations, marking it as a standout leader in post-quantum cryptographic research.

What is fully homomorphic encryption (FHE)?

FHE is a type of encryption that allows data to be processed without ever decrypting it. This means users and systems can compute directly on encrypted data, thus ensuring full privacy at every stage.

Traditional encryption requires data to be decrypted before use, exposing it to potential threats. With FHE, the data stays encrypted during processing, eliminating those risks and removing the need to trust intermediaries.

FHE is based on lattice cryptography, which was 

 in 2024 as a post-quantum encryption standard. This makes FHE inherently quantum-resistant, future-proofing it against tomorrow's security threats.

Mind Network applies FHE across its ecosystem to support secure AI operations, encrypted consensus and decentralized governance. Resulting benefits include quantum-resistant encryption, zero-trust scalability and crypto-economic integrity.

 of the Mind Network ecosystem. It's used to activate AI agents, pay for secure computation and participate in decentralized governance.

The total supply is capped at 1 billion tokens, with 41.7% allocated to the community and airdrops. As of Apr 14, 2025, its circulating supply stands at 249 million FHE.

 is currently live, with eligibility open to CitizenZ Passport holders, vFHE voters, testnet participants and more. Tokens can be claimed on MindChain or BNB Smart Chain.

, giving users a simple and secure way to buy, sell and hold the token. As a global exchange, Bybit offers a user-friendly interface, low trading fees and fast execution speeds.

Bybit is running an exciting campaign for new and existing users, lasting through Apr 24, 2025, 9AM UTC. Simply deposit and trade FHE for a chance at winning a share of 3,600,000 FHE. Head to the 

Intermediate

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Mind Network (FHE): Pioneering fully homomorphic encryption tech

Re introduces a new use case for Ethena Labs' USDe and sUSDe stablecoins, allowing users to lock them as reserve assets to support global insurers via the Resilience Foundation.

The S&P 500 futures fell after a 0.17% dip Tuesday, pressured by Nvidia's drop and U.S.-China trade tensions. Gold surged past $3,240, rising over 6.5% as safe-haven demand spiked on US-China trade tensions and falling Treasury yields. Investors are watching Powell’s speech and retail sales data for further cues. The Coindesk Indices, which tracks the broader crypto market, are down by 2.10%, with Bitcoin and Ether down by 1.06% and 2.43%, respectively in the past 24 hours. Trade these markets and more with up to 500x leverage on Bybit MT5 using this 

Today's top performer is STRK, up 5.9%, following Argent's launch of Easy Bridging to simplify self-custody on Starknet.

Starknet (STRK), founded in 2018, is a Layer 2 Ethereum solution that uses zero-knowledge rollups and STARK proofs to scale transaction processing efficiently. 

, a feature that simplifies funding its mobile wallet by allowing users to send crypto from any chain, exchange, or wallet directly into Argent on Starknet. Powered by Layerswap, the process mimics a simple transfer: pick a token and chain, copy the deposit address, and send. Layerswap bridges assets using liquidity pools, making the transition from CEXs or other wallets to Starknet fast and frictionless. With no seed phrase, 2FA, low fees, and seamless UX, Argent is making self-custody on Starknet accessible to all.

Check out the latest prices, charts, and data of 

 a new use case for Ethena Labs' USDe and sUSDe stablecoins, allowing users to lock them as reserve assets to support global insurers via the Resilience Foundation. Users can earn up to 23% APY, including 5x Ethena rewards, while their capital helps underwrite health, property, business, and climate insurance. This connects crypto-native assets to the $1T+ reinsurance market, providing additional sources of returns and contributing to real-world risk coverage. Deposits are capped at $50M, with quarterly redemptions available.

Yesterday, BTC spot ETFs saw $38.2M in net inflows, all from non-GBTC funds.

, a decentralized edge AI platform backed by NVIDIA and Forum Ventures with $15M in funding, has launched a rewards system tied to an upcoming confirmed airdrop. Users can earn points by completing simple tasks after connecting their EVM wallet and social accounts. As part of CoinMarketCap’s Accelerator Program, ByteNova aims to support low-latency, secure AI applications. Early participation is encouraged to maximize airdrop eligibility.

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Re unlocks new use case for USDe & sUSDe stablecoins, connecting crypto to the $1T+ reinsurance market

Trading

Profit and losses are inevitable. But to know what's a realized and unrealized gains is essential. So here are all the must know.

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At the end of the day, profit and loss are what investors are looking into when trading any financial assets. An investment may be profitable on paper, but the profits aren’t real if you never actually sell your investment. That’s precisely why you must familiarize yourself with the concept of realized and unrealized gains and losses.

When a cryptocurrency that you own appreciates in value, the last thing you want is to sell when there’s a potential gain. On the flip side, there’s a saying in Wallet Street — “

, and pigs get slaughtered.” In other words, never be greedy! This is good advice, but it’s easier said than done.

In this guide, you’ll learn how to differentiate gains and losses that are realized or unrealized to plan your next move based on investment results. 

How Are Realized Profits Different From Unrealized Profits?

When a crypto investor sells his asset, he will gain a loss/profit, known as realized loss/profit. Likewise, any running profit or loss on the crypto asset is considered an unrealized profit/gain. 

Typically, investors hold their unrealized gain or loss for future price appreciation. When the anticipated profit is achieved, they can easily cash out the investment. At that time, the unrealized profit will then be converted to a realized profit. 

In short, you don’t gain anything from your investment until you sell your assets. Realized profit becomes a matter of consideration as soon as you sell your asset. Therefore, it is vital to understand the total amount of profit and loss if you want to be a successful cryptocurrency investor.

When comparing crypto-to-fiat and crypto-to-crypto trading, the transactions work the same when it comes to how profits and losses are made. However, the hardest part about crypto trading is knowing when to cash out.

The following section will further explore the details of realized and unrealized gains and losses and their importance for traders.

Realized gains and losses are profit/loss achieved when you sell any financial instrument. When investors buy a share or commodity, they pay fiat currencies for buying that particular instrument. Later on, they usually convert the instrument to fiat currency again with a profit/loss when they sell it. 

The most important aspect of realized profit is that it can be subject to 

, depending on the jurisdiction. When you sell any financial instrument for a profit, you have to pay taxes for it. Conversely, if you take a loss on selling any assets, you can deduct the capital gains tax from your tax obligation.

For example, if you buy a house that is valued at $100,000 and sell it for $120,000 after a certain period, you will make $20,000 of realized gain. This realized gain is subject to capital gains tax.

On the other hand, if you sell the same house for $80,000, you will take a $20,000 loss. In that case, you have a chance to 

If you buy any crypto asset in financial trading, you will inevitably have profit/loss based on its price fluctuation. This price fluctuation is not taxable until you sell the cryptocurrency and achieve realized gains or losses.

Closed P&L refers to the realized P&L of a position upon exit. It’s a total sum of the profit/loss from price difference and also transaction and funding fees. Closed P&L is the actual number credited to or deducted from wallet balance.

Closed P&L = Position P&L – Fee to open – Fee to close – Total funding fees paid/received

For example, Ann’s 100,000 BTCUSD long position was entered at $9,266.50. BTC price rises by almost $200 and she decides to take profit. She places a market order and closes the position at $9,417.5.

The realized profit from price change is 0.173 BTC = 100,000 x (1/9,266.5 – 1/9,417.5). The position is entered and closed by market order, and thus she pays 0.075% transaction fees, which is 0.008 BTC and 0.0079 BTC respectively. She receives 0.0018 BTC funding payment while holding the position.

The closed profit of this position is 0.1589 BTC = 0.173 BTC – 0.008 BTC – 0.0079 BTC + 0.0018 BTC. 

Unrealized gains or losses are floating profit/loss achieved before selling any financial instrument. As soon as an investor buys a financial instrument, there will be a profit/loss due to the price fluctuation. Profit/loss from this price fluctuation is unrealized profit/loss until the financial instrument is sold.

The unrealized gain/loss is the potential profit/loss that an investor would gain from selling any investment. In other words, if an asset’s value is projected to make a profit/loss, but there is no cash inflow/outflow from it, it is an unrealized gain/loss.

The method for calculating unrealized gain/loss is straightforward. Investors compare the current market value with the 

 to calculate the unrealized gain/loss. If the current value is higher, it is an unrealized gain, and if lower, it is a loss.

Investment in Bitcoin gives us a perfect example of unrealized gain/loss. For example, if you 

 for $20,000 and hold your investment until the BTC price reaches $60,000, you’ve made a $40,000 profit. This profit is unrealized because you haven’t yet sold your investment. Once you do sell and receive the money invested, it becomes a realized gain/loss with a profit.

We can simplify the formula for calculating unrealized gain/loss as follows:

Current Market Value − Historical Value = Unrealized Gain/(Unrealized loss)

If the value obtained by this calculation is positive, it is an unrealized gain. If the resulting number is negative, it is an unrealized loss.

Like the Closed P&L example above, Ann enters a 100,000 long position at $9,266.5 by market order. On the position tab, she can review her unrealized P&L real time.

Unrealized P&L refers to the estimated profit and loss of an open position, also known as floating P&L. The unrealized P&L displayed in the position tab is calculated based on the last traded price.

Ann’s long position was entered at $9,266.5 and the LTP is $9,433.

Unrealized P&L (LTP) = 100,000 x [ (1/9,266.5) – (1/9,433) ]* = 0.1904 BTC

*Unrealized P&L = Contract Qty x [(1/Avg Entry Price) – (1/Last Traded Price)]

This unrealized P&L is calculated as if the position can be closed at LTP. However, even if Ann closes her position immediately, the execution price may deviate from LTP.

If Ann hovers the mouse cursor over unrealized P&L, a different figure will be displayed, which is unrealized P&L based on mark price.

Ann’s long position was entered at $9,266.5 and mark price is now $9,428.57.

 Unrealized P&L = Contract Qty x [(1/Avg Entry Price) – (1/Mark Price)]

The Mark Price is not a traded price, but rather a reference price for liquidation trigger. Therefore, the unrealized P&L based on mark price also serves as a reference to manage liquidation expectation.

 to find out more about unrealized P&L for short positions.

Please also note that the unrealized P&L does not include any transaction or funding fees while holding the position.

How to Calculate Unrealized Crypto Gains and Losses

Unlike traditional investments, cryptocurrencies are complicated as there are two methods of buying. The first one is 

, and the second is buying crypto with crypto. 

In the traditional investment model, share transactions are straightforward as there is no peer-to-peer trading. Investors generally conduct a stock brokerage and buy different stocks based on future potential. The whole process is relatively simple. You pay cash to the broker and buy stocks, for example, shares of Facebook. Once the stock’s value is higher, you have an unrealized gain, and once you sell the stock at a higher value, you will make realized gains.

A similar scenario applies to the cryptocurrency market when you buy cryptocurrencies with fiat currencies. For example, let’s say you have bought Ether at $100. You hold the investment until the value reaches the $3,000 level and decide to cash your profit. Once you sell Ether in exchange for fiat currency, you take a realized gain of $3,000 − $100, or $2,900.

But what if you have Bitcoin in your wallet and you’ve bought another cryptocurrency with it?

The exchange of one cryptocurrency to another is also a subject of taxable gain. For example, let’s say you have bought $50,000 worth of Bitcoin and exchanged the BTC for Ether. Later on, the value of the Ether rose and reached $90,000. In that case, the realized gain would be $90,000 − $50,000, or $40,000.

The Unrealized P&L% is essentially the Return on Investment (ROI) of the position.

Unrealized P&L% = [ Position’s unrealized P&L / Position Margin*** ] x 100%

***Position Margin=Initial Margin+Margin Replenishment +Fee to close

In Ann’s case, here is a summary of the unrealized P&L and unrealized P&L% under different leverage settings.

Under different leverages, the absolute values of the unrealized P&L remain constant. However, the unrealized P&L% increases with the leverage. The increase of unrealized P&L% is a result of reduction of initial margin as leverage increases.

The realized and unrealized gain in cryptocurrency differs from the traditional financial market, particularly for Bitcoin.

Bitcoin is the most traded cryptocurrency in the world. It has achieved the status of a safe-haven investment opportunity. Moreover, the recent 

 of Bitcoin has reached $1 trillion, which is a significant milestone for the cryptocurrency market.

The massive retail and institutional involvement in Bitcoin happens through both long-term and short-term capital gains. Moreover, investors buy other cryptocurrencies, 

 with Bitcoin or Ethereum. Therefore, both crypto-to-crypto and crypto-to-fiat transactions occur. So the realized or unrealized gain for Bitcoin is different from traditional assets.

There are usually two investment models in Bitcoin: Buying a cryptocurrency and holding it for a long time is known as HODL, and speculating on the short-term price volatility is known as active trading. 

Let’s look at these two methods in detail.

HODL is often referred to in the cryptocurrency market as “hold on for dear life,” having originated from a misspelling of “hold.” This term is used particularly in a bear market when prices fall, but investors decide not to sell their assets and instead hold onto them with the hope of future price appreciation.

When the price of a cryptocurrency comes down, investors are subject to unrealized loss. However, if HODLers sell cryptocurrencies for a profit, they will earn realized profit.

HODL in Bitcoin involves both realized and unrealized gain/loss. Investors should pay capital gains tax for every realized gain they achieve when they HODL. Any failure to calculate the realized gain accurately will affect your tax calculation.

The cryptocurrency market doesn’t move straight up or down. Rather, it moves with a zig-zag formation.

Therefore, the short-term volatility of price creates a trading opportunity when traders stay active and focused on the price fluctuation.

For example, if you buy Bitcoin at $10,000 with the hope of future price appreciation, it will not reach your target straight off. For example, it might come down first, with some swing lows and highs before moving to your target. Active trading, like swing trading, is a process to catch those swings, rather than holding the trade as HODLers do.

In active trading, traders take multiple trades from swing levels where every sell is subject to realized gain or loss. Unlike HODL, calculating the realized gain/loss from active trading is complex as the number of trades increases.

Numerous portfolio trackers and cryptocurrency software programs can help investors manage their realized and unrealized profit/loss. Moreover, these tools often help optimize your tax position. However, you should be aware of the differences between each specific jurisdiction’s capital gains tax rate.

Case Examples of Realized and Unrealized Gains

This section will look at some practical examples of realized and unrealized gain in the cryptocurrency market.

Adam is an investor who adopts a long-term buying strategy (or HODL) for Bitcoin. He buys 1 Bitcoin in 2018 for $10,000. In early 2021, Adam finds that Bitcoin has reached $60,000, and he decides to sell it. Here, Adam will gain an unrealized profit of $50,000 as soon as the price reaches the $60,000 level.

Later on, Adam sells his Bitcoin. Due to the price fluctuation, the sale takes place when the price has moved to $58,000. Therefore, Adam makes $48,000 (that is, $58,000 − $10,000) as a realized gain. Now this realized gain is subject to capital gains tax. 

When Adam calculates his income tax, he should pay taxes for his realized gain. On the other hand, before selling his Bitcoin, there was unrealized gain and no income tax charge.

, Anna is a Bitcoin speculator who catches short-term price fluctuation only. She invests $5,000 in Bitcoin through USDT. On the next day, Anna finds that Ethereum has a higher potential for price appreciation than Bitcoin.

Therefore, she converts the $5,000 worth of Bitcoin to Ethereum. However, the situation worsens when Ethereum’s price crashes, and the value of Anna’s investment drops to $3,000. So Anna exchanges her Ethereum for Bitcoin, with a loss of $2,000.

However, the crypto market became unstable, and Bitcoin’s value started to fall, following Ethereum. Anna’s $3,000 investment in Bitcoin falls to $2,000, and she withdraws this amount in USD.

Anna made a crypto-crypto exchange in the first trade, so her $2,000 is a realized loss that will affect her income tax calculation. In addition, in the second trade, Bitcoin was exchanged for fiat currencies, making it possible for Anna to consider the $1,000 hit as a realized loss.

Any exchange of cryptocurrency or fiat currencies involves realized or unrealized gain/loss. The ultimate effect of these gains/losses is a respective increase or decrease in 

It is often difficult for traders to find the right time to sell a crypto asset. Selling a crypto asset for profit will provide realized gains, but investors will pay taxes on this gain. On the other hand, selling a crypto asset with loss may incur realized loss, allowing investors to take a deduction on their taxable income.

In this context, the best approach is to minimize the capital gains tax as much as possible by holding a crypto asset for a considerable time.

Moreover, timing the market is very important as the financial market is very volatile. Investing involves risks. Investors can reduce loss by diversifying their portfolios with multiple crypto assets so that one’s gain in one investment may offset losses from others. 

Additionally, following a strong trading strategy is important. Investment in the financial market is not a guessing game. There should be logic and reason behind every decision.

Besides endeavoring to remain continuously profitable, investors should keep realized profit/loss in their tax planning.

What Are Realized and Unrealized Gains and Losses?

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