How to handle the the PnL of Bitcoin trading?

chan.pat93's Avatar

chan.pat93

10 Sep, 2017 04:18 AM

For trading of Bitcoin, I don't know whether I should treat Bitcoin as Currency or Stock in order to calculate the PnL of trading.

If I put it as a Stock, I cannot transfer among accounts (But I do always transfer bitcoin among different accounts). Therefore, Bitcoin as stock do not work for me.

If I treat Bitcoin as currency (like AUD, USD) in Moneydance, it seems that I cannot calculate the PnL of trading.

Any suggestion of how to use moneydance to calculate/record the PnL of bitcoin trading. Thank you.

Moneydance 2011r2 (803)

  1. Support Staff 1 Posted by Henry on 11 Sep, 2017 02:23 PM

    Henry's Avatar

    Hi,

    Thank you for contacting us.
    I believe the most used option is creating a new currency BTC and then creating a new account of type Asset using that currency. Then when you buy bitcoins it's a transfer from your bank account to the asset account using an exchange rate. When the value of BTC changes you just update it in the currency price history.

    The closest report we have to a profit and loss report is the Income and Expense Report.

    Henry
    Infinite Kind Support

  2. 2 Posted by chan.pat93 on 13 Sep, 2017 02:06 PM

    chan.pat93's Avatar

    Thank you Henry,
    Therefore, the first thing I need to do is to setup bitcoin as one of the currency in my MD.
    I click “Tools” -> "Currencies" -> "New" -> There are 5 boxes as follows:

    Currency ID: Bitcoin
    Currency Name: Bitcoin
    (What is the difference between Currency ID and Currency Name?)

    Value Prefix: What should I put ?
    Value Suffix: What should I put ?
    Max Decimal Places: What is the Max Decimal Places MD support?

    Finally where MD gets the quote of Bitcoin, I note the ticker for Bitcoin (USD) in yahoois BTC/USD where should I put this ticker?

    Thank you.

  3. 3 Posted by chan.pat93 on 22 Sep, 2017 10:10 AM

    chan.pat93's Avatar

    Could I have the input from Moneydance to address my problem. Thank you.

  4. Support Staff 4 Posted by Henry on 25 Sep, 2017 12:56 PM

    Henry's Avatar

    Please accept my sincere apologies for the delay getting back to you. I’m afraid it’s only now we’ve been able to work through the backlog of older discussions.

    This setup should give you the correct download:

    Currency ID: BTC
    Currency Name: Bitcoin

    Value Prefix: empty
    Value Suffix: empty

    Henry
    Infinite Kind Support

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