Why is PLN positive every day or does the daily PLN of the coin show positive while the original investment amount (Cost Basis) is negative?
I will analyze it for investors and newbies to understand, so when making the decision to sell coins, they need to consider the average cost, the original investment value, and the current value to decide on effective investment by holding or cutting losses!
The PLN (Profit and Loss) of crypto shows positive, but the cash flow of the original investment is negative for several reasons:
1. *Calculate the value*: PLN of crypto is usually calculated based on the current value of the asset, not the original value. If the value of the asset increases, PLN will show positive, even if the cash flow of the original investment is negative.
2. *Interest rates and fees*: Crypto exchanges often charge interest and fees for transactions. If you invest in crypto and hold it for a long time, interest and fees can accumulate and make PLN show positive.
3. *Tax calculation*: In some countries, taxes on profits from crypto investments are only calculated when you sell the asset. If you have not sold the asset, taxes have not been calculated, and PLN may show positive.
4. *The difference between market value and book value*: The market value of a crypto asset may differ from the book value (original value). If the market value increases, PLN will show positive, even if the book value is negative.
5. *Other factors*: There may be other factors affecting the PLN of crypto, such as market events, regulatory changes, or technical factors.
To better understand the PLN of crypto and the cash flow of the original investment, you should:
1. *Check financial reports*: Check the financial reports of the exchange or the crypto asset management company to better understand how PLN is calculated.
2. *Learn about tax regulations*: Research the tax regulations in your country to better understand how to calculate taxes on profits from crypto investments.
3. *Seek advice from experts*: Seek advice from financial or accounting experts to better understand the PLN of crypto and cash flow of the original investment.
Note: Recording PLN, the original investment value, and the coin value after each day is very important for you to develop an investment habit and track investment effectiveness!