Break-Even Point (BEP)

The Break-Even Point (BEP) in crypto refers to the point at which the total revenue generated from a cryptocurrency investment equals the total costs associated with acquiring and holding that investment. It represents the point at which there is neither profit nor loss.

Example:

Imagine an investor purchases 10 Bitcoin at $50,000 each, totaling an investment of $500,000. They also incur additional costs such as transaction fees, exchange fees, and storage fees, amounting to $5,000.

Total investment cost = $500,000 + $5,000 = $505,000

Now, if the price of Bitcoin rises to $55,000 per coin, the investor's investment value becomes:

Investment value = 10 Bitcoin * $55,000 = $550,000

At this point, the investor hasn't made a profit yet, as they need to cover their initial investment costs. The Break-Even Point (BEP) in this case would be reached when:

Total revenue = Total investment cost

So, to calculate the BEP:

$550,000 = $505,000 + X

X = $45,000

This means the price of Bitcoin needs to rise by $45,000 per coin for the investor to reach the Break-Even Point.

If the price of Bitcoin continues to rise beyond the Break-Even Point, the investor starts making a profit. Conversely, if the price falls below the Break-Even Point, the investor incurs losses.