An unrealized gain (or loss) is the change in value of an asset you still hold — a profit or loss that exists only on paper. It becomes a realized gain or loss the moment you actually sell, turning a notional figure into a concrete outcome.
The distinction is more than semantic. An unrealized gain can shrink or vanish before you sell, since the price can move against you at any time. Only a realized gain is locked in, and in most jurisdictions only a realized gain triggers a tax event.
This is why "paper" wealth and spendable wealth differ. A large unrealized gain can tempt overconfidence, while seeing one evaporate can prompt panic. Knowing which kind of gain you are looking at keeps decisions grounded in what is actually banked.
Worked example
A coin up 40% that you have not sold is an unrealized gain; selling it makes the gain real — and usually taxable.
This definition is general education, not investment advice. Markets — especially crypto — are volatile and you can lose money. Please read our disclaimer and see our methodology.