In your Bitpanda portfolio, we show helpful statistics like your Average Buy Price and Total Return to give you a quick overview of your investments. However, due to how these numbers are calculated, there are a few limitations worth knowing. This article explains how these calculations are generated and what their limitations are.

 

How Returns Are Calculated: Simple Dietz Method

We use the Simple Dietz formula to calculate your relative returns. This method uses time-weighted returns, meaning it focuses on the timing of cash flows in and out of your portfolio, rather than how much money was invested.

Here’s a simplified version of the formula:

Dietz Index = (B - A - C) / (A + C/2)

Where:

• A = Beginning portfolio value
  
  
• B = Ending portfolio value
  
  
• C = Net external flows (e.g., buys, sells, deposits, or withdrawals)
  
  

We use several data points (timestamps that store your asset value and related non-performance flows). By deducting the non-performance amount (such as purchases or staking rewards) from the asset value, we isolate the performance-driven change in value.

Note: Tax Withholding for Austrian users: We use a different calculation for taxes, so the actual tax withholding is completely separate from the performance calculations shown in your portfolio. For tax withholding, we use the gliding average buy price in accordance with all specific tax regulations (incl. old stock, crypto-to-crypto swaps etc.). Further information can be found here. 

 

There’s No “True” Average Buy Price

The average buy price is not a fixed or universally agreed-upon number, especially when your portfolio includes various transactions, transfers, rewards, or swaps. Different platforms and tools may calculate ABP differently depending on the chosen method or the interpretation of certain transaction types. This means that what one provider shows as your average buy price might differ from what Bitpanda shows, depending on how the calculation is handled. It’s important to see this number as a helpful estimation, not a strict accounting metric.

 

Known Limitations

Returns Are Not Money-Weighted

The current return calculation is time-weighted rather than money-weighted. As a result, larger trades don’t automatically carry more weight in the performance shown.

Merged / Redenominated Assets and Corporate Actions

Events such as token merges, redenominations, stock splits, or reverse stock splits can lead to inconsistent calculations.

Rewards Affect the Average Buy Price

Rewards like staking payouts, BEST rewards, or BTC card cashback gradually reduce your ABP, since you’re receiving more of the asset without additional spending.

Example:
You buy 0.01 BTC for €1,000 → ABP = €100k/BTC
You later receive 0.01 BTC as a reward → Total BTC = 0.02
→ New ABP = €50k/BTC

This reflects the fact that your total cost per unit has decreased.

Spotlight Giveaway and other free Assets Show 100% Return

Assets received entirely for free (like through Spotlight giveaways) will initially show a 100% return. Once you buy additional amounts of that asset, the return percentage adjusts accordingly.

What This Means for You

• Your actual holdings and returns are not impacted by these calculation nuances, only the displayed performance might differ from the expected values.
• These calculations are helpful indicators, not final accounting values.
• We’re continuing to work on improving how we calculate and present these stats, especially around complex asset events and return accuracy.
• If the values provided on Bitpanda are not sufficient, third-party software may help by offering additional features such as advanced portfolio tracking or refined value trend visualisations to support more detailed insights.