Return on Investment (ROI)
trading · metrics
A measure of profitability calculated as net gain divided by initial cost, often expressed as a percentage.
ROI compares net gain or loss with the initial amount spent. In crypto, it can be applied to trades, mining equipment, liquidity positions, marketing spend, or treasury allocations, but it is only one profitability metric.
ROI ignores time, volatility, liquidity, and risk. Fees, taxes, funding costs, impermanent loss, and slippage can reduce realized ROI, while annualized or risk-adjusted metrics may provide a better comparison.
Related terms
Market Capitalization
→A sizing estimate calculated by multiplying an asset's reference price by its reported circulating supply.
finance · market
Liquidity
→How easily an asset can be bought or sold in size without causing a large price move.
finance · trading
Volatility
→The degree of variation in an asset’s price over time; higher volatility implies larger and more frequent price swings.
trading · metrics