How to Calculate Profit When You’ve Bought Crypto in Multiple Batches
Buying Bitcoin at $20,000, then again at $35,000, then again at $48,000 leaves you holding one asset with three different price tags. When you sell, which price do you use?
Learning how to calculate crypto profit from multiple purchases correctly keeps your numbers accurate and your tax reporting clean.
Understanding Cost Basis When You Buy Crypto in Batches
Cost basis is simply what you paid for an asset, including fees. When you buy the same coin at different times and prices, each purchase becomes its own “lot” with its own cost basis. According to the IRS FAQs on virtual currency transactions, if you don’t identify specific units when you sell, the units are treated as sold in the order you bought them — oldest first. That default method is called FIFO.
First In, First Out is the IRS default cost basis method for U.S. tax reporting when you don’t document specific lot identification at the time of sale.
FIFO vs Average Cost: Two Ways to Track Your Purchases
FIFO assumes your earliest purchase is the one you’re selling. It’s the IRS default method for U.S. tax reporting and works per wallet or exchange account, not pooled across every place you hold crypto.
Realized vs Unrealized Profit
- Unrealized profit: The gain on coins you still hold, based on current price minus cost basis. It’s paper profit until you sell.
- Realized profit: Locked in once you sell, calculated as sale price minus the cost basis of the specific lot sold.
Some investors also track a simple average cost per coin for personal budgeting, though this isn’t an accepted method for U.S. tax filing — FIFO or documented specific identification is required there.
Calculating Gains on Multiple Crypto Purchases: A Real Example
Say you bought 0.5 ETH at $1,800, another 0.5 ETH at $2,400, and a third 0.5 ETH at $3,000. You later sell 0.5 ETH at $3,600.
| Method | Lot Used | Realized Profit |
|---|---|---|
| FIFO | First lot ($1,800) | $1,800 |
| Average Cost | Blended ($2,400) | $1,200 |
Under FIFO, you’re selling your first lot: $3,600 − $1,800 = $1,800 realized profit. Under a blended average cost ($2,400 per 0.5 ETH across all three lots), the same sale shows a $1,200 profit instead. The method you choose changes your reported number significantly, even though nothing about the trade itself changed.
The trade doesn’t change — only the accounting method does. Always apply the same method consistently within an account to avoid reporting errors.
Use our free Crypto Profit Calculator to run your own batches through FIFO and average cost side by side — no login needed.
Conclusion: Track Every Batch, Not Just the Total
Calculating crypto profit from multiple purchases comes down to knowing which lot you’re selling and applying that method consistently. FIFO is the default, but the method you pick changes your realized gain. Check your numbers with our Crypto Profit Calculator before you file or plan your next trade.
