Unrealized Gains

Unrealized gains are the potential profits on an investment that has not yet been sold. These gains exist only as long as the asset is held and its current market price is higher than the original purchase price.

In crypto, this is often referred to as paper profit. If the market price drops, these gains can quickly vanish or turn into unrealized losses.

They are not finalized until the asset is traded back into a stable currency or another asset. Many traders use unrealized gains to gauge the performance of their current portfolio.

However, these figures can be misleading due to high market volatility. They do not represent liquid capital available for withdrawal.

Realized returns are only achieved when the position is closed. Managing unrealized gains involves deciding when to lock in profit before market conditions change.