Selling into USDT isn’t profit yet
Three kinds of “profit” in crypto
When people say “I’m up”, they usually mean one of three things. They are different, and mixing them up is the main reason people overestimate their result.
- Paper profit — a coin went up but you haven’t sold it. The number moves with the market every minute.
- Realized profit — you sold a coin above your average purchase price, for example ETH into USDT. The profit is locked in, but the money is still in crypto.
- Money that came back to you — you cashed out to your card or bank account, or paid for something real with crypto. Only this money no longer depends on the market.
Why USDT in your portfolio isn’t profit yet
A stablecoin is worth about a dollar, so selling into USDT feels like “going to cash”. But for your money nothing has ended:
- USDT stays on an exchange or in a wallet, inside the same crypto world with all its risks: the exchange, the wallet, the stablecoin itself.
- Free stablecoins almost always get reinvested. The next buy can wipe out the whole realized profit.
- In most places you can’t pay rent or buy groceries with USDT until you cash it out.
That’s why Crypto Journal counts a sale into USDT as Realized profit, and adds it to Withdrawn only after a Withdraw.
A worked example
Take a simple scenario. You deposit $1,000 and buy ETH with it.
| Step | What happened | In portfolios now | Withdrawn | Realized profit |
|---|---|---|---|---|
| 1 | Deposit: $1,000 → ETH | $1,000 | $0 | $0 |
| 2 | ETH goes up 50% | $1,500 | $0 | $0 |
| 3 | Sell ETH into USDT | $1,500 | $0 | +$500 |
| 4 | Buy SOL with 1,500 USDT, SOL drops 40% | $900 | $0 | +$500 |
At step 4 your exchange app may show “+$500 realized profit”. The real result is 900 + 0 − 1,000 = −$100. There was a realized profit, yet you now have less money than you put in.
Another path: at step 3 you withdraw $600 to fiat and buy SOL with only 900 USDT. After SOL drops 40%, the portfolio holds $540. The result: 540 + 600 − 1,000 = +$140, and $600 is already on your card, out of the market’s reach.
How to count honestly: two formulas
- Result = In portfolios now + Withdrawn − Deposited. This is the full result, including what is still in crypto.
- Fiat balance = Withdrawn − Deposited. It shows whether you have got your money back. While it is negative, you are risking your own money. Once it turns positive, everything left in crypto is pure upside.
Count both numbers in the currency you live in. If you deposited euros, lira or rubles, your result in dollars can differ from your result in your own currency because of the exchange rate.
How to track it: 4 steps
- Record every deposit: the date, how much of your currency you paid, which coin and how much you got. The rate on that day is the price of your money.
- Split your money into strategy portfolios: long term, mid term, a goal. Transfers between them don’t change the total and don’t count as investing.
- Record sales, but don’t confuse them with withdrawals. Free stablecoins are money inside a portfolio.
- Record every withdrawal: to fiat or paying with crypto, and what it was worth in your currency. Only these amounts count as Withdrawn.
Common mistakes
- Treating the exchange’s “PnL” as your profit. It doesn’t know how much of your own money you put in or took out.
- Adding up results from different exchanges and wallets by eye. Transfers between them are easy to count twice.
- Counting only in dollars when you deposit and withdraw in another currency.
- Forgetting fees on deposits and withdrawals: they shrink both what you put in and what you take out.
FAQ
Is selling into USDT a profit?
It is a realized profit, but not money back in your pocket. USDT stays in crypto and can be reinvested and lost. The money becomes yours when you cash out to fiat or pay with crypto.
What is the difference between realized and paper profit?
Paper profit is the rise in price of a coin you still hold. Realized profit is the difference between the sale price and your average purchase price after you sell.
How do I calculate my real crypto result?
Result = in portfolios now + withdrawn − deposited. Also check the fiat balance = withdrawn − deposited: it shows whether you have got your money back.
Which currency should I count my result in?
The one you live in and spend. If you deposited euros or lira, your result can be positive in dollars and negative in your own currency, or the other way around.
Do I pay tax when I sell crypto into USDT?
It depends on your country: in some, swapping crypto for a stablecoin is already a taxable event. This article isn’t tax advice; check your country’s rules with a professional.
Count your result in Crypto Journal ↗
This article is for information only and is not financial, investment or tax advice. Numbers in the examples are illustrative.