Average Purchase Price

Definition ∞ Average Purchase Price represents the calculated mean cost at which an investor acquired a particular asset over multiple transactions. This metric considers the total capital expended divided by the total quantity of the asset obtained. It is a fundamental indicator for assessing an investor’s overall position and potential gains or losses. This value smooths out price fluctuations from different acquisition points.
Context ∞ For digital assets, the average purchase price is a crucial figure for investors tracking their portfolio performance and for tax reporting. Market analysts frequently reference this metric when discussing investor sentiment or potential selling pressure at various price levels, offering insight into aggregate market positions. Understanding this figure helps in evaluating investment strategies.