Steps
Break every buy into an amount and a price: coins from that buy = amount ÷ price.
Add all the coin amounts to get total coins, then divide total invested by total coins to get the average cost.
Plug in the current price to get position value and unrealised P&L.
Formulas
amount i ÷ price isum of coins across all buystotal invested ÷ total coinstotal coins × current price − total investedWorked example (recompute it yourself)
Three buys of 1,000 USDT each, at 3,000 / 2,500 / 2,000 USDT:
Coins per buy = 0.3333 / 0.4 / 0.5, so total coins = 1.2333. Total invested = 3,000 USDT.
Average cost = 3,000 ÷ 1.2333 ≈ 2,432 USDT — clearly below the simple average of the three prices, 2,500 USDT.
The gap comes from the 2,000 buy, which acquired the most coins for the same amount and pulled the weighted cost down.
Notes
The formula above excludes fees. Including buy fees raises the effective average cost slightly.
"Lower average cost" is not the same as "smaller loss": the loss depends on current price versus total invested, and buying more at lower prices increases position size and exposure.
Average cost is a bookkeeping measure — it says where your cost sits, not whether to buy more.
FAQ
How is BTC average cost calculated?
Average cost = total invested ÷ total coins, with total coins = Σ(amount ÷ buy price). It is amount-weighted, not the simple mean of your buy prices.
Why is it lower than the average of my buy prices?
Because equal amounts at different prices buy more units at the lower price, which tilts the weighted cost downward. The wider the price spread, the bigger the gap.
Does averaging down reduce risk?
It lowers average cost but increases position size. If the price keeps falling, the loss grows with the larger position. Lower cost is not the same as lower risk.