Two different "averages"
The arithmetic mean of your buy prices just adds the prices and divides by the number of buys — it ignores how much you bought at each price.
Average cost is "total invested ÷ total coins": each amount is converted to coins at its own price and summed, then the total is spread over those coins. It is weighted by amount (and by quantity).
Formulas
amount i ÷ price isum of coins across all buystotal invested ÷ total coinsWorked example (recompute it yourself)
Case 1 (equal amounts): two buys of 1,000 USDT each, at 80,000 and 20,000. Coins = 0.0125 + 0.05 = 0.0625, so average cost = 2,000 ÷ 0.0625 = 32,000 USDT — while the arithmetic mean price is (80,000 + 20,000) ÷ 2 = 50,000 USDT.
Case 2 (unequal amounts): 1,000 USDT at 80,000 and 3,000 USDT at 40,000. Coins = 0.0125 + 0.075 = 0.0875, so average cost = 4,000 ÷ 0.0875 ≈ 45,714 USDT — while the arithmetic mean is still 60,000 USDT.
Both cases show that whenever the prices differ, average cost departs from the simple mean, and the larger the share bought at lower prices, the wider the gap.
Notes
Fees are excluded above; including buy fees raises the effective average cost slightly.
Average cost is a bookkeeping measure — it says where your cost sits, not whether to keep buying or to average down.
FAQ
With equal amounts, is average cost still not the mean price?
Correct. With equal amounts, average cost is the harmonic mean of the prices: in the example two 1,000 buys at 80,000 and 20,000 give 32,000, below the arithmetic mean of 50,000.
Why is average cost always below the arithmetic mean price?
Because quantity is inversely related to price: the same amount buys more units when the price is low, tilting the weighted cost toward the lower prices.