Analyzing how crypto assets have performed over time is extremely helpful in making trading decisions and forecasts. Find out what the year-to-date (YTD) metric means in this context!
What Is “Year-To-Date”?
Year-to-date is a metric that is used to assess how an asset has performed since the beginning of a calendar year. In other words, it measures how much a cryptocurrency’s price has increased or dropped over the period from January 1 to the current date.
What You Need To Know About “Year-To-Date”
To calculate a crypto asset’s YTD, you will need to follow this formula:
YTD = (current asset value – starting year value) / starting year value * 100
Let us illustrate the year-to-date definition with an example. For instance, at the beginning of 2021, Bitcoin’s price equaled $29,032 – by April 1, it rose to $59,056.
Here’s how you would calculate BTC’s YTD in this case:
(59,056 – 29,032) / 29,032 * 100 = 103%
This means that from 01.01.2021 to 01.04.2021, the world’s largest cryptocurrency secured 103% of year-to-date gains.
As you can see, the year-to-date metric can provide traders with valuable insights into how profitable an asset in question is. Due to this, it is implemented not only across the crypto space but also in traditional investments and even has use cases in accounting and bookkeeping.
Note that YTD shouldn’t be confused with the year-over-year (YOY) metric. While both these concepts are equally valuable for traders to evaluate the assets’ performance, they are calculated differently.
To determine the year-to-date performance, you need to find the percentage difference between a crypto asset’s price on the 1st of January and a given date, while to find out the YOY growth you would have to compare the asset’s price on two exact dates one year apart from each other. Here’s the YOY calculation formula:
YOY = (Current Period Value ÷ Prior Period Value) – 1
Therefore, YOY provides traders with an overview of an asset’s performance over an extended period, while YTD is most useful for strategic decisions throughout the ongoing year.
