⚡ TL;DR – What Is Unrealized Profit and Loss (PnL)?
Unrealized profit or loss refers to the change in value of your crypto holdings that has not yet been locked in by a sale or trade. It represents your “paper gains” or “paper losses” based on current market prices — not actualized until you exit the position.
❓ Unrealized Profit & Loss: What It Means in Crypto
In crypto trading, Unrealized PnL shows how much profit or loss you would have if you were to sell an asset at its current market price.
- Unrealized Profit = You’re in the green, but haven’t sold yet.
- Unrealized Loss = You’re in the red, but still holding.
- Realized PnL = You’ve executed the trade and locked in the gain/loss.
Until you sell, swap, or close your position, your profit or loss remains unrealized.
Example of Unrealized PnL
Let’s say you bought:
- 1 ETH at $1,500
If ETH is now trading at $2,000, your unrealized profit = $500
But if ETH drops to $1,200, your unrealized loss = $300
If you don’t sell, these gains or losses are only on paper — they’re not “real” until the position is closed.
Why Does Unrealized PnL Matter?
Even though it’s not locked in, unrealized PnL impacts your decision-making:
- Helps track portfolio performance
- Used by exchanges and DeFi apps to calculate margin, collateral, or liquidation risk
- May influence tax strategy, depending on your jurisdiction
- Allows you to determine entry/exit points without emotional trading
In DeFi protocols, unrealized PnL may even affect your borrowing limits or staking rewards.
Realized vs Unrealized: Key Differences
| Aspect | Realized PnL | Unrealized PnL |
|---|---|---|
| Triggered by | Sale or trade | Market movement only |
| Taxable? | Yes (in most countries) | No (until sold) |
| Impacts cash flow? | Yes | No |
| Final outcome? | Yes — locked in | No — subject to change |
| Use case | Performance reporting, taxes | Risk tracking, decision making |
Where You’ll See Unrealized PnL in Web3
- Crypto wallets with portfolio tracking (e.g. Zerion, Debank, Phantom)
- Centralized exchanges (CEXs) like Binance and Bybit
- DeFi dashboards like Zapper or Apeboard
- Margin trading platforms, where it may affect your collateral ratio
- NFT marketplaces, where floor price changes reflect paper PnL
Tools to Monitor Unrealized PnL
You can use these platforms to track unrealized PnL across your wallets:
- Zerion / Debank / Zapper – Real-time portfolio values
- Ledger Live – For hardware wallet balances
- CoinMarketCap Portfolio – Tracks value change from your entry point
- DEX aggregators like 1inch may show PnL per swap
Most tools will show PnL per asset, and sometimes across chains.
🔑 Key Takeaways
- Unrealized PnL shows the profit or loss of your current holdings based on market price.
- It becomes realized only when you sell, swap, or close a trade.
- Useful for tracking performance, tax planning, and managing DeFi positions.
- Not taxable or withdrawable — but essential for understanding your exposure.
- Real gains require execution — not just holding.
❓ Frequently Asked Questions About Unrealized PnL
It’s the profit you have based on current prices, but haven’t locked in by selling.
No — in most jurisdictions, it only becomes taxable once the position is sold (realized).
Yes — if your asset value drops significantly, your unrealized loss may trigger liquidation on lending platforms.
Use portfolio trackers like CoinMarketCap, Debank, or Zerion to see your asset values vs your entry price.
That depends on your strategy. Some traders use unrealized PnL to rebalance or take partial profits, while long-term holders may ignore it until exit.
