They bought in haste — will they repent at leisure?

A stampede of new investors hoovered up bitcoin at lofty prices as crypto fever ran high after Donald Trump swept to victory in the November U.S. presidential election.

The cryptocurrency market is known for its volatility, and recently, this volatility has been amplified by several factors, leading to a significant sell-off in bitcoin and other major tokens.

As the dust settles on the rapid price declines, analysts at Bitfinex point out that those who entered the market recently, enticed by bitcoin's rally past $100,000, are now bearing the brunt of the cryptocurrency's downturn.

As of Wednesday, bitcoin was trading at approximately $80,000, a substantial decline from its January peak of above $100,000, though still up more than 200% since the start of the year.

Bitcoin's price-spent output profit ratio, an indicator of the ratio between the prices at which new bitcoin is being bought and sold, has dipped to 0.95, its lowest level in over a year and negative for the first time since October, according to estimates from Bitfinex.

"This suggests that recent buyers are locking in significant losses, reinforcing the exceptionally challenging conditions for newer investors," Bitfinex analysts said.

The world’s largest cryptocurrency hit a record high of $109,071 on Jan 3, but has since lost most of the gains racked up since the American election, as concerns about U.S. tariff policy, the health of the world’s largest economy and a tech selloff sap risk appetite.

"I was surprised to see bitcoin at $80,000 and it looks like the bloodletting hasn't ended yet," said Kevin Dede, analyst at investment bank H.C. Wainwright.

Even U.S. President Donald Trump's executive order to create a bitcoin strategic reserve and an additional stockpile of other crypto tokens gave the crypto market only a temporary boost.

"This corrective selloff has caught many by surprise," said John Glover, chief investment officer of crypto lending platform Ledn, adding the asset could find support at the $73,500 level.

According to data from crypto data and analytics firm Glassnode, at least 20 million new bitcoin addresses, about 1.5% of all bitcoin addresses in existence, have been created in the past three months.

Traders who entered the market using leveraged positions are feeling the pinch, with Bitfinex analysts noting that this group's realised overall losses are hovering above $800 million per day, with February 28 and March 4 seeing some of the biggest single-day losses.

Meanwhile, investment products tracking digital assets saw outflows for the fourth straight week, according to CoinShares data. Total assets under management in these products have dipped around $4.75 billion to $142 billion. That's the lowest since mid-November 2024 after the U.S. election.

U.S. spot bitcoin ETFs saw outflows of around $1.1 billion in outflows on February 25, the biggest daily outflow since their launch in January last year, according to J.P.Morgan.

"The large outflows from U.S. and Canadian Bitcoin ETFs last week were surprising. Perhaps some investors are rotating out of riskier assets in response to the recent stock market volatility," said Ben Zhou, CEO of crypto derivatives exchange AscendEX.

While past selloffs in crypto markets are often followed by some amount of calm as the market finds its footing, bitcoin may be at the mercy of broader markets for the time being.

The implied or future bitcoin volatility priced into derivatives has spiked to 69% in the last 24 hours, while the second-largest token ether's ETH= implied volatility has increased from 65% to 90% since Monday, meaning investors expect more choppiness ahead, according to Amberdata.

"The last two weeks have 100% been driven by the equity market tantrum," said Jeff Dorman, chief investment officer at asset manager Arca in a note. "This likely plays out similar to what we saw in late 2018, which was nothing more than a short-term hiccup on the way to further highs."