Your average purchase cost is the total amount paid divided by the total units acquired. It is not usually the simple average of the prices shown in your trade history. The difference becomes important when purchases are different sizes or the same spending amount buys different quantities.
The formula
Average purchase cost = total purchase amount ÷ total units purchased. Work in one currency and use actual filled quantities. If you include fees, be consistent about whether the fee increased your cash cost or reduced the units received.
A two-purchase example
| Purchase | Amount spent | Price per unit | Units acquired |
|---|---|---|---|
| First | $100 | $50 | 2 |
| Second | $100 | $25 | 4 |
| Total | $200 | Not applicable | 6 |
Your average cost is $200 ÷ 6, or approximately $33.33 per unit. Taking the simple average of $50 and $25 gives $37.50, which is incorrect for these purchases because you bought more units at the lower price.
Try the example in our calculator
- Open the average purchase cost calculator.
- Enter 100 as the first purchase amount and 50 as its price per unit.
- Enter 100 as the second purchase amount and 25 as its price per unit.
- Select Update result. The result should show 33.33 per unit, total paid of 200 and 6 units.
The calculator uses your inputs. It does not fetch market prices, connect to an exchange or include fees. It models two purchases rather than a full trading ledger.
What a new purchase does to the average
A purchase below your existing average lowers the combined average, while a purchase above it raises the average, assuming positive quantities and no other changes. This is arithmetic, not a reason to buy. Adding money to an asset that keeps falling can increase the amount you lose.
Consider a third illustrative purchase: $100 at $20 buys 5 units. Across all three purchases, you have spent $300 and bought 11 units. The combined average becomes about $27.27. The two-purchase calculator does not accept a third line, so use your records to total additional purchases.
Average cost is not the same as dollar-cost averaging
Average cost describes what you paid. Dollar-cost averaging describes a schedule of investing equal amounts at regular intervals. You can calculate an average cost even when purchases were irregular. A regular purchase schedule does not guarantee a profit or prevent losses.
Costs that change the answer
- Buy fees: if you paid $202 in total and received 6 units, the fee-inclusive average is about $33.67.
- Fees deducted in the asset: use the units actually received, rather than the quantity before the deduction.
- Currency conversion: convert consistently before adding amounts denominated in different currencies.
- Sales and transfers: this simple calculation does not determine how disposals, tax lots or transfers affect accounting records.
Use the trading fee calculator for a separate illustration of buy-and-sell percentage fees. Its assumptions may differ from your exchange’s actual charging method.
Common questions
Does a lower average mean I am in profit?
No. Profit depends on sale proceeds after relevant costs compared with what you paid. An unsold holding can still fall in value.
Can I use this as my tax cost basis?
This tool is an educational estimate, not a tax ledger. Tax rules and permitted accounting methods depend on the jurisdiction and circumstances.
Can I use rupees instead of dollars?
Yes, if all amounts and prices use the same currency. The tool performs no currency conversion.
Continue learning
Before depositing more funds, read how to check a crypto exchange and complete the safety checklist.
Source and method
Investor.gov explains dollar-cost averaging. The numerical examples above are original illustrative arithmetic, checked against the calculator where applicable.
Reviewed 24 October 2026 by Team BizCryped. Educational information, not a recommendation to buy or sell.
