The heart of your misunderstanding is “withdraw profits”.
Once you have the reality clear in your head, the rest is simple arithmetic, the sort of adding, subtracting, multiplying and dividing you learned when you were a small child.
Lets do some adding, subtracting multiplying and dividing …
| Holdings | $ value | ₿ value |
|---|---|---|
| $90k | 90,000 | 1 |
| ₿0 | 0 | 0 |
| Totals | 90,000 | 1 |
I buy a one bitcoin for 90k
| Holdings | $ value | ₿ value |
|---|---|---|
| $0 | 0 | 0 |
| ₿1 | 90,000 | 1 |
| Totals | 90,000 | 1 |
it peaks at 94k
| Holdings | $ value | ₿ value |
|---|---|---|
| $0 | 0 | 0 |
| ₿1 | 94,000 | 1 |
| Totals | 94,000 | 1 |
I withdraw the profit of 4K.
When you “withdraw the profit” what you are doing is selling some of your Bitcoin for dollars at the current exchange rate. After you have sold some of your Bitcoin you have $4k but you now have less than 1 Bitcoin!
If the exchange rate is $94k = ₿1 then $4k = 4000 / 94000 = ₿0.042553191
To get the $4k you perceive as “profit” into your hands you have to sell ₿0.042553191 of your Bitcoin.
That means you now have ₿1 – ₿0.042553191 = ₿0.957446809
| Holdings | $ value | ₿ value |
|---|---|---|
| $4,000 | 4,000 | 0.042553191 |
| ₿0.957446809 | 90,000 | 0.957446809 |
| Totals | 94,000 | 1 |
In reality you also pay Bitcoin transaction fees to Bitcoin miners and probably pay conversion charges to the currency exchange. Most currency exchanges have “spread” or difference between their buying and selling rates. Most probably also have some other fee. It has probably been thus since people started making coins thousands of years ago. This is nothing new or special.
if then it drops to 93k does that mean [confused stuff]
If the exchange rate changes to ₿1 = $93k then
- your ₿0.957446809 is worth 0.957446809 * 93000 = $89,042.55
- your $4k is worth 4000 / 93000 = ₿0.043010753
| Holdings | $ value | ₿ value |
|---|---|---|
| $4,000 | 4,000 | 0.043010753 |
| ₿0.957446809 | 89,042.55 | 0.957446809 |
| Totals | 93,042.55 | 1.000457562 |
Need some clarity
All the above is nothing to do with Bitcoin, the sums would be the same if you were were buying and selling diamonds or carrots. It is nothing to do with complex finance. There is no more to it than simple arithmetic.
“Withdrawing Profit” is not some deep mysterious magic. It just means selling some of something you own.
