What is ROI (Return on Investment)?
Crypto Glossary Definition
The percentage gain/loss on an investment.
Why ROI (Return on Investment) Matters
ROI measures the percentage gain or loss on an investment relative to what was put in — in crypto, ROI is often quoted from all-time-high or all-time-low reference points, which can make returns look far more (or less) impressive than a simple entry-to-current comparison would show.
ROI (Return on Investment) in Practice
A crypto investor puts two thousand dollars into Ethereum and checks the position's value eighteen months later to find it's worth five thousand dollars; dividing the three-thousand-dollar gain by the original two-thousand-dollar cost gives an ROI of one hundred fifty percent. That entry-to-current calculation is straightforward, but ROI figures thrown around on social media are often measured very differently — a promoter might instead quote a coin's return from its all-time low to its current price, a window that could show a gain of several thousand percent even though almost no real buyer entered at that exact bottom. Conversely, someone trying to argue a project underperformed might calculate ROI from the token's all-time high, making a genuinely profitable investment look like a loss. Because of this flexibility, savvy readers of any crypto ROI claim ask what two specific price points and dates were actually used before trusting the number. ROI also ignores time entirely, which is why analysts often pair it with annualized return figures when comparing a position held for three months against one held for three years — a raw ROI percentage alone can make a short, lucky trade look far more impressive than a steady long-term holding.
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