Mar 24, 2025: Our weekly Institutional Insights explores the latest market developments — market performance, industry news, exchange-traded fund (ETF) flows, trending topics, upcoming events and token unlocks — to help you supercharge your crypto trading.

 explores the latest market developments — market performance, industry news, exchange-traded fund (ETF) flows, trending topics, upcoming events and token unlocks — to help you supercharge your crypto trading.

Weekly highlight — retail buying continues

In a turbulent stock market facing trade issues and economic slowdown fears, retail investors are undeterred, increasing their investments despite mounting losses.

In the week ending Mar 19, 2025, individual traders invested over $12 billion into US equities, significantly above their 12-month average, according to JPMorgan Chase. This aggressive buying suggests that stocks may not have hit bottom yet, as retail investors typically hold on longer during downturns.

This behavior mirrors previous down years, such as 2022, when the equity benchmark fell 19%. Currently, retail investors are facing a 7% loss for the year, while the S&P 500 has dropped 3.7%.

Despite a sharp market sell-off in late February 2025, retail buyers remained active, contrasting with institutional investors who exited US stocks quickly. A recent Bank of America report showed significant stock inflows from both institutional and private clients, totaling $43.4 billion this year.

However, Wall Street sentiment is increasingly bearish, with several major firms downgrading their expectations for US equities. Individual investor sentiment has also weakened, with bullish views dropping below 20% for three consecutive weeks.

Disconnection between investor sentiment and actions is evident, highlighting that retail investors are continuing to invest despite prevailing bearish attitudes.

Weekly crypto highlight — Stablecoin bill on track for approval

A key US House committee is set to advance significant 

 legislation, a priority for President Donald Trump and the crypto industry. The House Financial Services Committee panel will review the bill on April 2, driven by bipartisan support from figures like New York Senator Kirsten Gillibrand and increased campaign funding for pro-crypto candidates.

Committee Chairman French Hill emphasized that a regulated stablecoin market could enhance the US dollar's dominance, modernize payments and improve financial access without government overreach. Crypto firms are advocating for stablecoins as a means to provide affordable and faster financial services globally.

Dollar-backed stablecoins are designed to bolster demand for US dollars, and are typically supported by highly liquid assets. However, critics, including Congresswoman Maxine Waters and Senator Elizabeth Warren, argue the legislation lacks consumer protections. They seek to ban tech companies like X and Meta from issuing stablecoins, and highlight concerns over the absence of safeguards such as FDIC insurance, as well as potential risks to deposit levels and credit access.

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Weekly Institutional Insights: Retail buying continues; Stablecoin bill might pass

Find out all the reasons why you should purchase Tomorrowland Brasil presale tickets with the Bybit Card in our detailed article!

 is one of the most anticipated events of the year. With world-famous DJs, surreal stage designs and an electric crowd, it’s no surprise that tickets get snapped up in minutes. If you’ve ever tried your luck at getting in through the general sale, you’ll know it’s not easy.

If you’re dreaming of dancing under the stars in Parque Maeda this year, there’s one secret weapon you need: the Bybit Card. Not only does it give you access to exclusive presale tickets, but it also unlocks a lineup of perks that make your entire festival experience smoother, smarter and way more rewarding.

Let’s dive into why using the Bybit Card is your best move if you want to be part of Tomorrowland Brasil 2025.

 is a crypto debit card that lets you spend your crypto or fiat anytime, anywhere Mastercard is accepted, online or in-person.

. It’s your gateway to living the crypto lifestyle with convenience, rewards and total flexibility. With the Bybit Card, you can choose to pay in crypto like BTC, ETH, XRP, TON, USDT, USDC, MNT or BNB, as well as in USD. Everything is linked directly to your Bybit wallet, so there’s no need for manual transfers or separate apps.

Users can enjoy up to 10% cashback just for using the card on everyday purchases. You’ll also get 100% rebates on popular subscriptions like Netflix, Spotify, Prime, ChatGPT and TradingView, making your spending work harder for you.

And the best part? You can start using your virtual card immediately after approval. It’s free to apply, and there’s no waiting around. All you need to do is verify your account, get your card and you’re ready to spend.

Why should you buy Tomorrowland Brasil presale tickets via Bybit Card?

Buying your ticket early is already a win — but using your Bybit Card to do it? That’s a whole new level of smart. Here's why:

Bybit is the sole official presale partner

Let’s start with the biggest flex: Bybit is the only official presale partner for Tomorrowland Brasil 2025. That means presale access is exclusive to users who hold a Bybit Card — and no one else.

From Mar 22, 2025 to Apr 3, 2025, you can register for the presale using a Tomorrowland account, and then buy your tickets from Apr 4, 2025, 10:00 BRT/15:00 CEST through Apr 6, 2025, 10:00 BRT/15:00 CEST before the general public even gets a shot.

No bots. No stress. No heartache. Just you, your Bybit Card and early access to one of the most iconic festivals on earth.

Yes, you read that right. Buying your tickets with a Bybit Card could score you bonus credits to spend inside the festival. Whether it’s drinks, food or merch, those extra funds mean you get more festival for less out of your own pocket.

It’s the kind of bonus that makes a real difference when you’re buying your third round of caipirinhas after dancing for hours.

Everyone wants that limited-edition Tomorrowland merch. But what if you didn’t have to queue for hours or fight the crowds for it?

Bybit Card users can gain access to exclusive, co-branded Tomorrowland x Bybit items — stuff you can’t find at the main merch booth or even online. This is your chance to grab a unique piece of festival history!

Festival tickets can be expensive — but here’s where the Bybit Card flips the script. 

New Bybit Cardholders who deposit 100 USDT in their Bybit account will be eligible for 10% cashback capped at 50 USD equivalent in local currency. 

Please note that this is not stackable with any other new user rewards campaign, and this promotion will end on Apr 9, 2025.

Virtual card design exclusive to Tomorrowland and Bybit

To celebrate this iconic partnership, Bybit is rolling out exclusive Tomorrowland-themed virtual card designs for a sleek, festival-ready look that’s all vibes and no fuss.

Whether you’re paying for late-night food trucks or splitting a hotel with friends, every tap of your card will feel like part of the experience. Furthermore, it’s a cool digital souvenir that lasts long after the music ends.

If you’ve ever sat in a ticket queue, watching the loading screen spin endlessly, you know how frustrating general sales can be.

presale access through the Bybit Card means you skip that chaos completely. You no longer have to deal with refreshing the page a thousand times — or having to wait till the end just to receive an error message that the tickets have been sold out. Just a clean, direct path to the dance floor.

Scalpers love Tomorrowland. Within hours of the general sale, tickets end up on resale platforms at 2x (or even 3x) the original price. And that’s not even counting the risk of scams or fake tickets.

By securing your tickets with Bybit Card during the presale, you pay the official price, and you can sleep easy knowing your ticket is 100% legit. 

Local Brazilian citizens can celebrate early as they enjoy 50% off Tomorrowland Brasil presale tickets when they purchase with a Bybit Card. This promotion will be applied upon checkout, and it only applies to one ticket.

If you’re planning to attend Tomorrowland Brasil 2025, there’s no better way to secure your spot than with the Bybit Card. As the only official presale partner, Bybit gives its cardholders exclusive early access to tickets before the rush and the stress — and before prices surge on the resale market.

But the benefits don’t stop at early access. From festival credits and exclusive merch to cashback rewards, a sleek Tomorrowland-themed virtual card and even rebates on your favorite subscriptions, the Bybit Card is more than just a ticket to the festival — it’s an upgrade to your entire experience.

No annual fees, with instant spending, crypto and fiat support, and real-world perks? That’s the kind of card you want in your pocket — not just for Tomorrowland, but for every day.

So don’t wait until the chaos of the general sale. Apply for your Bybit Card today, register for your Tomorrowland account before Apr 3, 2025, and be ready to grab your presale tickets from Apr 4, 2025, 10:00 BRT/15:00 CEST through Apr 6, 2025, 10:00 BRT/15:00 CEST. Let the music guide you — and let Bybit open the gates!

Beginner

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8 reasons you need to get Tomorrowland Brasil presale tickets via Bybit Card

Get priority access to Tomorrowland Brasil 2025 presale tickets with Bybit Card! Follow our step-by-step guide and enjoy 10% cashback on your purchase.

Ready to celebrate LIFE with Tomorrowland Brasil? Tomorrowland Brasil 2025 presents you with a mystical world of magical plants and flowers in the beautiful festival area of Parque Maeda in Itu, a municipality of São Paulo. If you're ready to party in a lush, otherworldly environment, then make sure to follow the following simple step-by-step guide to buy Tomorrowland Brasil presale tickets using the 

 is a mega festival for electronic music lovers to groove to their favorite beats across six stages set in an ethereal realm of lush magical nature. It will run for three days, from Oct 10–12, 2025 at Parque Maeda in the city of Itu, São Paulo in Brazil. 

The gathering offers five ticket types: Day Pass, Full Madness Pass, Comfort area, Exclusive N°1 area and a DreamVille package. If you're traveling from overseas, you can also buy an all-inclusive Global Journey Travel Package. You'll enjoy more convenience with this package, as it includes the Festival Pass, hotel or DreamVille accommodation, access to The Gathering (an exclusive pre-party) and daily transfers between your boarding location, your accommodation and the festival itself.

Bybit is Tomorrowland Brasil's sole official presale partner, offering Bybit Cardholders the exclusive chance to buy festival presale tickets. To purchase tickets at the presale, you must pre-register for Tomorrowland Brasil at

. Registration runs from Mar 22 to Apr 3, 2025, and the presale will be held between Apr 4, 2025, 10:00 BRT/15:00 CEST–Apr 6, 2025, 10:00 BRT/15:00 CEST. 

Brazilian citizens can enjoy the ticket purchase at half price. If you're not a Brazilian citizen, you can still receive a 40% discount on your ticket by selecting the Social Ticket category. This option automatically includes a 30 BRL ($R30.00) donation to an institution chosen by the Tomorrowland Foundation.

How to buy Tomorrowland Brasil presale tickets with Bybit Card

To participate in the Tomorrowland Brasil presale, you’ll need to own a Bybit Card. If you still don't have a Bybit Card, you must first apply for one. The Bybit Card comes in two versions: Physical and Virtual. The Bybit Virtual Card is free, and can be used to 

 immediately after you’ve successfully applied and been approved. If you're a new Bybit Cardholder purchasing a presale ticket with a Bybit Card, you can also 

 that you must register before the presale date.

:Go to your Tomorrowland Account and click on the 

 button. Before the ticket sale, check the different ticket types to ensure you select the correct ticket and date. (

: It’s recommended that you purchase your ticket

 from a desktop device. If you choose to purchase via a mobile device, make sure your screen doesn’t get locked, as the website may automatically reload and you’ll have to reenter the queue.)

Enter the first 8 digits of your Bybit Card.

 Select the number of tickets (which will come as a Bracelet) to buy. You can purchase up to six tickets per Tomorrowland Account. 

 Upon selecting your desired purchase, you’ll be redirected to the 

onfirm that you’ve read, understood and accepted the terms and conditions of the event before proceeding to 

 You’ll be prompted to authenticate your device via email or mobile number. Enter the 4-digit PIN code sent to your email or mobile number, and clickon 

 Verify your personal details, and click on 

Select how you want to receive your Bracelet, either via delivery or pickup, then click on 

. If you’ve chosen the delivery option, you’ll receive the Bracelet in a Treasure Case. You can then activate it and top it up with Pearls. If you’ve chosen to pick up your Bracelet, you can collect it at the Bracelet Pickup Desk on the day of the event. 

 that the pickup option excludes the Treasure Case.

:Pay for your ticket using your Bybit Card: enter your card details and click on

 After successfully making payment, you’ll receive a confirmation email with all the details of your purchase and a link to personalize your ticket. You won't receive your e-ticket yet, but the email will contain a voucher with your order number and the delivery address you confirmed at the time of checkout. Make sure to keep this email until the end of the festival, as the voucher serves as a receipt of your purchase. You can also click on 

to confirm the details of your ticket purchase.

Personalize your ticket/Bracelet by filling in your personal data. Note that the name you indicate has to match the name on your identification document; if not, you may be denied access to the festival. If you’ve purchased the ticket for a friend(s), you’ll need to fill in the data of the respective participant(s). 

Not only does having a Bybit Card give you the opportunity to purchase Tomorrowland Brasil presale tickets, but you can even enjoy 10% cashback with your purchase if you’re a new Bybit Cardholder. If you still don’t own a Bybit Card — what are you waiting for? 

 now and purchase your Tomorrowland Brasil presale tickets to enjoy the best electronic festival experience of your life — and more!

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A step-by-step guide to buying Tomorrowland Brasil presale tickets 2025

Our weekly crypto derivatives analytics report delves into macro events, the current state of crypto and trading signals from spot trading volume, and futures, options and perpetual contracts.

Global asset prices stabilized this week, with cryptocurrencies maintaining a strong correlation to US equities during the recovery. BTC is trading above $85K, and ETH has regained the $2K mark. Despite this, derivatives market activity remains low, with negative funding rates for major tokens like BTC, ETH and SOL. Demand for short-dated options, which had surged for downside protection, has decreased as realized volatility has subsided.

Please check out the report’s highlights.

Short-term protection falls as the market calms

A quieter spot market corresponds with a calmer options market. While lower realized volatility hasn't restored BTC's term structure of at-the-money implied volatility to an upward slope (as it has for ETH), short-dated volatility has decreased. The recent pause in a month-long sell-off has stabilized option markets and sharply reduced demand for short-dated protective puts.

Lower realized volatility in ETH’s spot price has reversed the at-the-money implied volatility term structure, leading to reduced volatility expectations. However, options activity remains significantly lower than at the end of February 2025, with modest open interest in longer-dated contracts and the rollover of expired weekly options. Demand for call options is exceeding that for puts, as ETH's spot price has rallied to the key $2K level.

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Bybit X Block Scholes crypto derivatives analytics report (Mar 21, 2025): Short-term protection subsidies as sentiment reverses

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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