What is cryptocurrency?

A cryptocurrency is a digital, programmable form of money that operates on a public network. Instead of a central bank updating balances, thousands of network participants maintain a shared ledger. If the network records that you own 0.2 BTC, that’s your balance — no middleman or bank required.

Most people interact with crypto through a wallet or an exchange. A wallet holds the private keys that prove ownership of your coins; an exchange holds the coins for you. On-chain, funds move between addresses and every transaction is permanently recorded.

Crypto isn’t one single thing. Bitcoin focuses on being scarce, secure digital money with predictable issuance. Other projects — like Ethereum, Solana, or BNB Chain — specialize in running applications, smart contracts, NFTs, or DeFi protocols. When you “invest in crypto”, you’re really investing in a specific network with a unique purpose.

Unlike stocks, most coins don’t represent company ownership or generate cashflows. Their value often comes from utility (e.g., ETH is needed to use Ethereum), speculation (people expect higher prices), or their role in securing the network.

Because the market is still young and sentiment-driven, prices can move extremely fast in both directions. That’s why having a repeatable investing plan — and the ability to backtest it — matters so much.

What is blockchain?

A blockchain is a special type of database that is shared, time-ordered, and extremely difficult to alter. Every few seconds or minutes, a new “block” of transactions is proposed. Once participants agree on it, the block is permanently added to the chain. This design provides transparency (anyone can see past transactions) and integrity (rewriting history is nearly impossible).

Bitcoin’s blockchain was designed to do one thing exceptionally well: enable anyone to send value online without a bank. Ethereum expanded that idea — instead of only storing “A sent B 0.5 ETH”, it can store “A executed this smart contract with these inputs.” That’s how DeFi, NFTs, and on-chain apps are possible.

Different blockchains optimize for different goals. Bitcoin focuses on security and predictability. Ethereum prioritizes flexibility and developer ecosystems. Solana emphasizes high throughput, while BNB Chain is optimized for exchange-related use cases. This variation is also reflected in historical price behavior — and why, in your calculator, each coin has a unique earliest start year.

For investors, the key takeaway is that your calculator ultimately relies on real blockchain data — every backtest is built from how those assets actually traded through booms, crashes, and consolidations.

Why backtest a crypto plan?

Crypto markets are volatile. They surge in bull runs and can fall 60–80% during bear markets. Looking only at the final price makes it hard to understand what steady investing would have achieved over time.

A backtest answers exactly that: “If I started in 2017 with $1,000 and added $10 daily, what would my balance be today?” Often the result is better than expected because regular investing keeps buying during low prices as well as highs.

Recurring investing — or dollar-cost averaging (DCA) — works well for volatile assets because it automatically spreads your entry points. You buy some at peaks, some mid-cycle, and more during bottoms. In crypto, down cycles can last months — the calculator shows how continuous contributions during those periods often lead to strong long-term results.

Our crypto calculator goes beyond static spreadsheets: it lets you continue your plan beyond the last month of real data using your own annual return assumption. That way, you can explore “what if I keep doing this until 2030?” even if historical data ends in late 2025.

How our crypto calculator works

Here’s what happens behind the scenes when you use the Crypto Investment Calculator:

1. **Choose a coin.** The tool supports major assets: Bitcoin (BTC), Ethereum (ETH), Binance Coin (BNB), Solana (SOL), Dogecoin (DOGE), Cardano (ADA), Chainlink (LINK), TRON (TRX), Bitcoin Cash (BCH), Stellar (XLM), and Litecoin (LTC). Each has its own historical dataset.

2. **We load monthly prices from Yahoo Finance.** Some assets, like BTC and LTC, have data going back to 2014; many others start around 2017, and SOL begins in 2020. The available start year adjusts automatically per coin.

3. **Define your plan.** Enter your initial deposit, recurring contribution, contribution frequency (daily ➜ yearly), and time window (start ➜ end year).

4. **We normalize everything to months.** Whether you invest daily or weekly, the calculator converts your input to an equivalent monthly flow so it aligns with monthly price changes.

5. **We replay real market performance.** For each month, the calculator applies the actual price change of the coin. If BTC rises 10% that month, your balance grows accordingly after adding your new contribution.

6. **We extend beyond real data.** Once historical data ends (e.g. November 2025), we continue your projection using your chosen annual return assumption, converted into monthly compounding.

7. **We generate a yearly schedule and chart.** You’ll see how much you contributed each year and how much growth came from the market. The stacked chart clearly separates deposits, starting balance, and market returns.

Monthly compounding: Crypto trades 24/7, but monthly intervals make results readable and consistent with our other calculators.

Currency field: Selecting USD, EUR, or GBP only changes display format. We do not recalculate historical FX rates.

No fees/taxes: Results are gross. For a more realistic estimate, reduce your annual return assumption by 1–2 percentage points.

Shareable URL: Each coin and input are stored in the query string (e.g. ?coin=ETH), so you can share exact scenarios.

Supported coins

Below you can find the coins we currently support, the earliest year you can start backtesting for each asset, and a short explanation. Newer blockchains simply have a later minimum start year because their historical data is shorter.

Bitcoin is the first and most recognized cryptocurrency, designed as decentralized digital money. Transactions are recorded on a public blockchain maintained by thousands of participants worldwide.

With a fixed supply of 21 million coins, Bitcoin is often compared to digital gold. Its value mainly reflects demand, adoption, and the programmed issuance cycles known as “halvings”.

Because it has the longest reliable data series, Bitcoin is ideal for long-term DCA examples in the calculator — from 2014 onward — showing how steady investing performs through multiple market cycles.

Open BTC calculator

Ethereum introduced programmable blockchain technology. Instead of only sending value, users can deploy and interact with smart contracts — the base layer for DeFi, NFTs, and decentralized apps.

ETH is required to pay “gas fees” for using the network, so its demand is tied to on-chain activity. When more people use DeFi or trade NFTs, gas usage — and ETH demand — rises.

For investors, Ethereum demonstrates how recurring monthly investing can smooth out large market swings, from the 2020–2021 boom to quieter consolidation years.

Open ETH calculator

XRP was created to make international transfers fast, cheap, and reliable. It acts as a bridge asset between different currencies on the RippleNet payment network.

Instead of energy-intensive mining, XRP uses a consensus algorithm among trusted validators, allowing transactions to confirm in seconds with minimal fees.

Because XRP’s price often reacts to regulatory and legal news, it’s a good example in the calculator of how consistent DCA contributions can smooth volatile performance over time.

Open XRP calculator

BNB started as a utility token for trading fee discounts on Binance but evolved into the core asset of the BNB Chain ecosystem.

It’s used for paying transaction fees, staking, and participating in token launches or governance within Binance’s platforms.

BNB’s value strongly correlates with Binance ecosystem activity, making it a great mid-cycle coin for 2017–now DCA comparisons in the calculator.

Open BNB calculator

Solana is a high-performance Layer 1 blockchain built for speed and scalability. It uses an innovative Proof of History mechanism to order transactions efficiently.

The network enables ultra-fast and low-cost DeFi, NFTs, and gaming applications, processing thousands of transactions per second.

Since SOL price data starts around 2020, it’s perfect in the calculator to show short but intense real history followed by assumed steady growth for forward projections.

Open SOL calculator

Dogecoin began as a lighthearted project but became one of the world’s most recognized cryptocurrencies.

Technically based on Litecoin, it offers fast, low-cost transactions and is often used for tipping or micro-payments online.

DOGE is heavily driven by social media sentiment and hype cycles. In the calculator, it clearly illustrates how a steady DCA strategy can outperform attempts to time meme-driven markets.

Open DOGE calculator

Cardano is a proof-of-stake blockchain focused on academic research, security, and scalability through formally verified protocols.

Its native token, ADA, is used for transactions, staking, and running smart contracts within the Cardano ecosystem.

Because its development progresses in carefully planned stages, ADA provides a good contrast in the calculator against faster-moving platforms like Ethereum.

Open ADA calculator

Chainlink is a decentralized oracle network that connects smart contracts with real-world data such as prices, events, or APIs.

Without Chainlink, most DeFi protocols couldn’t securely access external information. LINK tokens reward node operators who provide accurate data.

In the calculator, LINK helps demonstrate how infrastructure tokens can have distinct performance cycles independent from broader market trends.

Open LINK calculator

TRON is a high-throughput blockchain focused on fast, low-cost transactions and digital content sharing.

It hosts a wide range of DeFi and stablecoin activity, especially popular in Asia, with one of the highest daily transaction volumes.

TRX in the calculator showcases how active, non-EVM chains with consistent data can still produce meaningful DCA insights.

Open TRX calculator

Bitcoin Cash was created in 2017 as a hard fork of Bitcoin aimed at larger blocks and lower transaction fees.

Its mission is to serve as peer-to-peer digital cash for everyday payments rather than just a store of value.

In the calculator, BCH offers a direct way to compare how Bitcoin’s major fork has performed relative to BTC since 2017.

Open BCH calculator

Stellar is an open payment network designed for fast, low-cost cross-border transactions between any currencies.

It focuses on inclusion and accessibility, partnering with NGOs and fintechs rather than banks, to bring digital payments to underserved users.

In the calculator, XLM highlights how utility-driven payment coins can still show steady accumulation results over multiple market phases.

Open XLM calculator

Litecoin is one of the oldest cryptocurrencies, often called the silver to Bitcoin’s gold. It shares much of Bitcoin’s design but with faster block times and lower fees.

Its long track record and stable network make it a reliable comparison asset for BTC in long-term backtests.

Because historical data goes back to 2014, LTC is excellent in the calculator for testing long DCA windows or comparing early altcoin performance.

Open LTC calculator

Example calculations

Example 1 – BTC, 2017 ➜ 2025, $1,000 start + $10/day

Open the calculator on Bitcoin (default) and set Start year to 2017 and End year to 2025.

Enter Starting amount = 1000, Recurring contribution = 10, Frequency = daily.

From 2017 onward, the tool replays real BTC monthly data — including the 2018 crash and 2021 bull run. During bear markets, your daily $10 buys more BTC at lower prices.

After the last month of real BTC data (November 2025), the calculator applies your assumed return — e.g., 5% annualized, spread monthly.

Example 2 – ETH, 2020 ➜ 2025, €200/month

Switch the coin to ETH so the URL becomes /crypto-calculator/?coin=ETH.

Set Start year = 2020 and End year = 2025. Enter Starting amount = 0 for a pure DCA plan. Set Recurring contribution = 200, Frequency = monthly.

The yearly schedule will show how steady monthly buys carried through the 2021 DeFi/NFT boom and quieter years after. You’ll notice contributions make up most of the final balance — ideal for long-term investing.

Example 3 – SOL, 2021 ➜ 2030, $500 start + $50/month, 6% assumed after data

Since Solana data starts later, choose the earliest available year — e.g. 2021.

Set End year = 2030 and Assumed return after last data year = 6%.

This shows a realistic mix: real, volatile SOL history for early years, followed by smooth 6% annualized growth — perfect for showing how newer coins might perform in long-term DCA plans.

Common pitfalls

Using only bull-market returns: Crypto goes through multi-year bear markets. Always test periods that include both ups and downs to avoid overestimating results.

Ignoring fees, taxes or spreads: Exchanges and brokers charge costs. Easiest fix: lower your annual return assumption by 1–2% to simulate real conditions.

Comparing coins with different start dates: A coin that began in 2020 can’t be fairly compared to BTC from 2015. Only compare overlapping years.

Not matching frequency to your plan: If you invest weekly, set weekly in the calculator. Using mismatched frequencies will distort results slightly.

Treating this as financial advice: This calculator is educational. Real-world outcomes may differ significantly from historical backtests.

FAQ