How to Calculate Average Buy Price in Crypto: A Complete Guide
1 min read
Summary
The average buy price, also known as the cost basis, is a crucial element in cryptocurrency trading as it allows investors to assess their gains and losses with accuracy.
The formula for calculating this is simple: divide the total amount spent on purchasing cryptocurrency by the total number of coins purchased.
This should be done for each wallet or exchange separately to get an accurate figure and taking into account any trading fees.
When using dollar-cost averaging, the average buy price can be lowered by investing a fixed amount over a period, thereby reducing the impact of price fluctuations.
It is essential to update figures frequently due to the volatility of prices in the crypto market, and using a portfolio tracker can help streamline this process.
With this information, investors can make educated decisions about when and how much of their cryptocurrency they should sell.