Your dashboard says you're up 8% this year. Your bank account says otherwise. Both can be true, because most trackers report a number that isn't really about your money — it's about the assets in the basket, regardless of when you bought them or how much you had in play.
The gap between the headline and your spendable gain comes from three places: how returns are calculated, how cash flows are handled, and which costs get quietly left out.
Time-weighted vs. money-weighted: the number that isn't yours
Almost every app defaults to a time-weighted return, or close to it. That figure answers a portfolio manager's question: how did this basket perform, independent of when cash arrived? Useful for comparing funds. Useless for describing your year.
Your actual result depends on how much capital was exposed during each up and down move. Put a large deposit in right before a rally and your money-weighted return beats the headline. Add it right before a drop and the headline flatters you while your account bleeds.
A concrete split
Say your tracker reports a 10% time-weighted gain for the year. You started with $20,000, then added $30,000 in month ten just as the market dipped 5%. The time-weighted number stays near 10%. Your money-weighted return — the one tied to your dollars — lands well below it, because most of your capital only experienced the bad stretch. Same portfolio, two different truths.
Deposits and withdrawals distort the curve
A big contribution can make a losing month look like a winning one on a naive chart. Withdrawals do the reverse, dragging the line down even when nothing lost value. Trackers that don't separate cash flows from market movement are showing you a graph of your banking activity, not your investing skill.
Where the confusion bites
- Bonus deposits. A year-end bonus inflates the account balance and can mask a flat year.
- Rebalancing. Selling one asset to buy another looks like activity, not a return event — but sloppy trackers count it.
- Transfers between accounts. Moving coins from an exchange to a wallet can register as a "loss" if the tool only sees one side.
Check whether your tracker lets you tag deposits and withdrawals as external cash flows. If it can't, every number above the balance line is suspect.
The costs and frictions that never show up
Fees are the silent variable. Trading fees, withdrawal fees, and the spread between buy and sell prices all eat into what you keep — and most dashboards report returns before these costs. A position that "gained" 4% might have handed back a chunk of that in execution.
On Kraken, for example, fees depend on your trading volume and the specific market, and withdrawal costs vary by asset and network. None of that appears automatically in a third-party tracker pulling your balances. You have to reconcile it yourself, or the return you see is a gross figure dressed up as net.
What to log by hand
Keep a simple record of fees paid per trade and per withdrawal. It's tedious. It's also the only way to know your true cost drag, especially if you trade often or move assets across networks.
Currency, staking, and the assets that don't fit the model
Trackers built for stocks assume a single currency and clean price feeds. Crypto breaks both assumptions. If you hold assets priced in dollars but think in another currency, the exchange rate moves your real return independently of the asset. A coin that's flat in dollars can be up or down once converted.
Staking and rewards add another wrinkle. Some tools count rewards as income; others fold them into price gains; some ignore them until you claim. Two trackers can disagree on your return for the same holdings. And if a reward token has thin liquidity, the "value" shown may not be what you could actually sell for.
Frequently asked questions
Why does my tracker's return differ from what I actually made?
Because most trackers report a time-weighted figure that ignores when you added or removed money. Your real gain depends on how much capital was exposed during each move, which is the money-weighted return. If you deposited heavily before a dip, your personal result will trail the headline number.
Do trackers include trading and withdrawal fees?
Usually not by default. Many tools pull balances and prices but don't know what you paid in fees or spreads, so the return shown is a gross figure. You'll need to log fees separately — Kraken's fee schedules and withdrawal costs vary by volume, asset, and network — to see your net result.
How should I handle staking rewards in my return calculation?
Pick one consistent method and stick to it: either count rewards as income when received or fold them into the position's value. The mistake is switching methods, which makes comparisons meaningless. Also discount rewards in illiquid tokens, since the displayed value may not be sellable at that price.
Open your tracker right now and find the money-weighted return setting. If it doesn't exist, export your transaction history and calculate it yourself. That single number is the one that matches your bank account.