Why your P/L looks wrong after withdrawing crypto to a wallet – and how to read it as a transfer, not a sale

You bought some crypto on an exchange, moved part of it to your own wallet, and the realised profit and loss suddenly dropped sharply into the red. Nothing was sold at a loss. So what happened?

This article explains why a withdrawal distorts the usual P/L figure, how to correct for it, and what the correction still cannot tell you. A worked example with round numbers runs throughout.

It is written for individuals who move crypto between several exchanges and wallets and want an accurate picture of how they are really doing. The information is as of 15 September 2026.

The symptom: realised P/L falls in the month you withdraw

Exchange P/L screens, and spreadsheets built from exported trade history, often calculate realised profit and loss with a formula like this one.

Realised P/L = sells − buys + cost of holdings − fees

The cost of holdings is what you paid for the coins you still have. Adding it back removes the unsold part of your purchases, so that what remains is the result of the coins you actually sold.

As long as every coin you buy either gets sold or stays on the exchange, this works well. The trouble starts when coins you bought leave the exchange.

Here is an example. The figures are rounded purely for illustration; they are not anyone’s actual trades or results.

• Buy 3 ETH at ¥400,000 each (buys: ¥1,200,000)
• Sell 1 ETH for ¥500,000 (sells: ¥500,000)
• Withdraw 1 ETH to an external wallet
• 1 ETH remains on the exchange (cost of holdings: ¥400,000)

Assume fees are zero to keep it simple. The formula gives ¥500,000 − ¥1,200,000 + ¥400,000 − 0 = −¥300,000.

But the only coin actually sold was bought for ¥400,000 and sold for ¥500,000. The true realised result is +¥100,000. The figure is off by ¥400,000.

The cause: an assumption that every coin is sold or still held

The gap comes from the assumption built into the formula: anything you bought has either been sold or is still sitting in your exchange account.

A withdrawal breaks that assumption. The coin disappears from your exchange balance, so it is no longer in the cost of holdings. It was not sold either, so it adds nothing to sells.

What is left is the purchase amount, still subtracted, with nothing on the other side to offset it. The cost of every withdrawn coin therefore shows up as if it were a realised loss.

The more you move out, the larger the distortion becomes.

This is less a calculation error by the exchange than a blind spot. From the exchange’s point of view, a coin sent to your wallet has simply gone.

Whether you sold it elsewhere or are still holding it is something only you know.

It can also appear gradually rather than all at once. If you move a little to a wallet every month, realised P/L drifts lower each month, which is easy to mistake for a slow run of poor trades.

The fix: treat a withdrawal as a transfer and add the cost back

The correction is to treat a withdrawal not as a sale, but as a move between your own accounts. In practice that means adding the purchase cost of the withdrawn quantity back into realised P/L.

Tracing exactly which purchase each withdrawn coin came from is rarely practical, so the cost is approximated with the average purchase price. The quantity to add back is the smaller of two numbers.

• Withdrawn minus deposited: the quantity you sent out, less any quantity you brought in from outside.
• Bought minus sold minus held: coins you bought that were neither sold nor are still on the exchange.

Taking the smaller of the two stops you from adding back cost for coins you never bought on that exchange. If either number is zero or below, nothing is added back.

In the example, both numbers come to 1 ETH, so 1 ETH × ¥400,000 is added back, and realised P/L returns to +¥100,000.

Deposits matter in the first number for a reason. If you withdraw 1 ETH and later send it back to the same exchange, the two movements cancel out, and no add-back is needed.

What the correction still cannot tell you

Adding the cost back removes the distortion caused by withdrawals, but it has limits. Keep these three in mind whenever you read the figure.

• Coins deposited from outside and then sold. The exchange has no record of what you paid, so the full sale proceeds appear as profit.
• The average price is an approximation. If you bought at very different prices over time, the cost of the coins you actually moved may differ from the average.
• Price moves after the withdrawal. Gains or losses on coins sitting in your wallet are not part of the exchange’s figures at all.

The first limit becomes important when you move coins between exchanges. Suppose the withdrawn 1 ETH goes to a second exchange and is sold there for ¥500,000. With no cost on record, the second exchange shows +¥500,000.

On the first exchange, the add-back cancels the apparent loss. Added together, the two exchanges show +¥500,000, while the true result is still +¥100,000.

To read it correctly, take the ¥400,000 of cost added back on the first exchange and subtract it from the profit shown on the second one.

A step-by-step check that includes withdrawals

1. Open your transfer history and note the date and quantity of each withdrawal.
2. Compare the months where realised P/L moved sharply with the months you withdrew.
3. Multiply the withdrawn quantity by your average purchase price to estimate the cost to add back.
4. For coins deposited from outside and then sold, discount the profit by what you originally paid.
5. Check the balance and current value of the withdrawn coins separately, in the wallet itself.

Only when the exchange figures and the wallet figures sit side by side does the overall picture appear. Neither one on its own tells you whether you are up or down.

A quick sanity check helps too. Your overall result should roughly equal the current value of everything you hold, wherever it is, plus yen taken out, minus yen put in.

What tends to work, and common pitfalls

In closing

When you withdraw crypto from an exchange to an external wallet, the common realised P/L formula counts the purchase cost of the withdrawn coins as a loss.

A withdrawal is a transfer, not a sale. Adding back the cost of the withdrawn quantity at the average purchase price brings the figure close to the result of your actual trading.

Coins deposited from outside and then sold still carry no known cost, so read that profit with a discount. Looking at exchange and wallet figures together is the most reliable way to see where you really stand.

(A general explanation based on information as of 15 September 2026; all figures are illustrative examples. Crypto assets are highly volatile and you can lose the money you put in.)

(This article does not recommend buying or selling any crypto asset. Keep records of your transfers and trades, and consult a professional if needed.)