A wave of new investors who rushed into Bitcoin at record-high prices following Donald Trump’s election victory are now facing steep losses as the cryptocurrency market experiences a sharp downturn.
Barely six weeks after Trump’s inauguration, Bitcoin has entered a bear market, shedding nearly a quarter of its value. The leading cryptocurrency, which reached an all-time high of $109,071 in January, has now slipped to around $80,000, dragged down by a broader sell-off in global stocks.
Investors who joined the rally past $100,000, particularly those using leveraged positions, are bearing the brunt of the downturn.
According to blockchain analytics firm Glassnode, at least 20 million new Bitcoin addresses—representing approximately 1.5% of all Bitcoin addresses—have been created over the past three months, signaling a surge in new entrants to the market.
Meanwhile, the spent output profit ratio, a key indicator measuring the price at which Bitcoin is bought and sold, has dropped to 0.95—its lowest level in over a year—turning negative for the first time since October, according to crypto exchange Bitfinex.
“This suggests that recent buyers are locking in significant losses, reinforcing the exceptionally challenging conditions for newer investors,” analysts at Bitfinex said.
Bitcoin’s price surge following the November election has now largely unraveled due to growing concerns over U.S. tariff policies, the health of the economy, and a sell-off in technology stocks.
“I was surprised to see Bitcoin at $80,000, and it looks like the bloodletting hasn’t ended yet,” said Kevin Dede, an analyst at investment bank H.C. Wainwright.
Even an executive order from Trump to establish a Bitcoin strategic reserve, along with additional stockpiling of other crypto assets, provided only a brief reprieve for the market.
“This corrective selloff has caught many by surprise,” said John Glover, chief investment officer at crypto lending platform Ledn.
Traders with leveraged positions have been particularly hard hit. According to Bitfinex analysts, realized losses among this group have exceeded $800 million per day, with February 28 and March 4 witnessing some of the largest single-day losses.
The downturn serves as a stark reminder of the volatility inherent in the cryptocurrency market, leaving many newcomers grappling with the risks of investing in digital assets.
