Unrealised and Realised P&L, With Actual Numbers

Someone tells you they made forty grand on Solana last year. There are two entirely different situations that sentence can describe, and the difference between them is the difference between owning a car and having seen one you like.

Trackers show both numbers. Most people read only one, and it is usually the wrong one.

What do the two figures actually measure?

Unrealised profit and loss is the gap between what you paid for something you still hold and what the market quotes it at right now. It moves every second, in both directions, without you doing anything at all. It is a hypothetical: what you would clear if you sold everything at the current quote, before fees, assuming a buyer exists at that price for your whole position.

Realised profit and loss is what happened when you actually disposed of something. You sold, or you swapped it for another asset, or you spent it. The transaction completed. The number is fixed and will never change again, whatever the price does afterwards.

The clean way to hold the distinction: unrealised P&L is a claim about the market. Realised P&L is a claim about your own history. One is a forecast, the other is a fact.

How does this look with real figures?

Take an actual sequence. Everything below is arithmetic you can check.

In March you buy 20 SOL at $95. You pay $1,900 plus a $4.75 fee, so your cost basis is $1,904.75, or $95.24 per SOL.

By September, SOL trades at $210. Your position is worth $4,200. Your unrealised gain is $2,295.25, or a shade over 120%. You have done nothing. You have received nothing. The number exists because other people traded SOL among themselves at higher prices.

In October you sell 8 SOL at $205. Proceeds are $1,640, minus a $4.10 fee, so $1,635.90 lands in your account. The basis on those 8 units, at $95.24 each, is $761.92. Your realised gain is $873.98. That figure is now permanent. It appears in your tax year. It will not change if SOL goes to $500 or to $30.

You still hold 12 SOL, basis $1,142.88. At $205 they are worth $2,460, an unrealised gain of $1,317.12.

Add the two ledgers together and your total profit on this position is $2,191.10. Notice it is slightly less than the $2,295.25 you were looking at in September, because you sold five dollars below the peak quote and paid fees on the way out. That gap between the number you saw and the number you got is the entire practical lesson.

Then December arrives and SOL falls to $120. Your realised gain is still $873.98. Your unrealised position is now worth $1,440 against a $1,142.88 basis, a gain of $297.12. Total profit: $1,171.10. Roughly half of what the app showed you in September evaporated, and none of the half you banked was affected.

Which figure you were watching in September determined whether that felt like a win or a disaster.

Why does the distinction change what you do?

Three practical consequences, and one psychological one that matters more than the rest.

For tax, the split is usually the whole ballgame. Most systems tax disposals, not holdings. Your unrealised gain has no tax consequence at all until you act on it, and the moment you do, the size and the timing both become permanent. This is why the last week of a tax year sees so much activity. It is also why crypto-to-crypto swaps catch people out: swapping ETH for SOL realises the ETH gain in full, in most jurisdictions, despite no fiat ever appearing. A tracker records the swap. Whether it records the disposal correctly is worth checking, and where a tracker ends and tax software begins covers what to expect from each.

For decision-making, unrealised profit is information about the market and realised profit is information about you. If your realised results are consistently worse than your unrealised peaks, you are not being unlucky. You are systematically holding past your own targets, and that shows up in the data long before you would admit it in conversation. A tracker that keeps a history is the only honest witness you have.

For risk, a large unrealised gain is a large concentration. The position that ran is now a bigger share of your portfolio than you chose, purely because it went up, which is the mechanic covered in allocation drift. Unrealised gains and concentration risk grow from the same event.

Why is unrealised profit so easy to mistake for money?

Because the app renders it in the same font as your balance, in the same currency, with the same decimal places. Nothing on the screen distinguishes a completed transaction from a market quote.

The failure this produces is specific and expensive. People spend against unrealised gains, upgrade their expectations to match a peak figure, and make position-size decisions on a number that assumes a buyer for the entire holding at the quoted price. For BTC or ETH that assumption is roughly safe. For a mid-cap token that trades on two venues with shallow books, it is not remotely safe: the quoted price is the price of the last small trade, and your position may be several times the depth of the order book. The exit price and the quoted price are different numbers, and the difference grows with your size.

There is a second-order version of the same error. A quoted gain feels like an achievement, which makes selling feel like giving something up. That is backwards. Until you dispose of the asset, the gain belongs to the market and can be revoked without notice. The September holder who watched $2,295 become $297 did not lose anything they had. They lost something they had been told about.

The practical counterweight is not discipline in the abstract. It is a number written down before the emotion arrives. Decide at what level a position stops being a bet and starts being a result, set an alert at that level, and let the app tell you rather than checking. Your first price alert covers the setup, and alert fatigue covers keeping the count low enough that you still notice when one fires.

What should you actually check, and how often?

Look at unrealised P&L when you are assessing risk: what am I exposed to, how concentrated am I, what would a 40% drawdown do to this total. It is the right tool for that job because it describes your present position.

Look at realised P&L when you are assessing yourself: what did I actually bank this year, what did my exits look like against my entries, which decisions worked. Once a quarter is plenty, and the last month of your tax year is not optional.

Do not let the first number substitute for the second. An unrealised gain describes a market that is being generous to you right now. It is a good thing to have. It is not a thing you have.

The next time your portfolio shows a number that makes you feel wealthy, find the realised figure underneath it. That one is yours.