Return on Investment (ROI)
A measure of profitability calculated as net gain divided by initial cost, often expressed as a percentage.
- Acronym
- ROI
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
3 linkedExplore connected entries beyond the alphabetical index.
Market Cap
→Market cap estimates a cryptocurrency's total circulating value by multiplying price by circulating supply.
Liquidity
→How easily an asset can be bought or sold in size without causing a large price move.
Volatility
→The degree of variation in an asset’s price over time; higher volatility implies larger and more frequent price swings.
All terms and definitions may update as the Cryptionary improves.
