Bitcoin fell below $40,000 as spot-ETF flows pulled in opposite directions

Bitcoin fell through $40,000 on January 22, 2024, turning the first weeks of U.S. spot bitcoin exchange-traded-product trading into a test of whether new demand could absorb selling from older vehicles.

Coinbase Exchange’s BTC-USD daily candle for the 24 hours beginning 00:00 UTC on January 22 opened at $41,553.92, reached $41,658.00, fell to $39,372.44 and closed at $39,524.27. The open-to-close loss was $2,029.65, or 4.88%, by Coinburn’s calculation. Coinbase recorded 26,539.34338688 BTC of volume in that single order book.

The move mattered because the market had attached unusually high expectations to the U.S. products that began trading on January 11. Instead of producing a one-way inflow story, the new structure exposed a contest between capital entering recently launched funds and holders exiting the converted Grayscale Bitcoin Trust, or GBTC.

A venue-level break, not a universal close

Reuters reported at 2:32 p.m. Eastern on January 22 that bitcoin was down 4.4% at $39,750 and at its lowest level since December 4, 2023. Ether was down 6.5% at $2,325.30 in the same timestamped report. Those figures were contemporaneous snapshots, not completed daily candles.

Coinbase’s record provides a reproducible measurement with a defined pair, venue and UTC window. Its $2,285.56 high-to-low range equaled 5.50% of the opening price, another Coinburn calculation. The close was $475.73 below $40,000.

Bitcoin nevertheless has no consolidated closing auction. Prices differ across exchanges, stablecoin pairs and index providers, while a UTC candle does not align with the U.S. securities session. Coinbase also warns that historical candles can be incomplete when an interval contains no trades, although that caveat is unlikely to explain an active full-day BTC-USD bucket. The volume figure is Coinbase-only, not global turnover.

ETF demand met legacy selling

The Securities and Exchange Commission’s January 10 order approved exchange rule changes covering 11 trusts whose shares would hold spot bitcoin in whole or in part. That regulatory action allowed listings; it did not endorse bitcoin, guarantee inflows or eliminate volatility in the underlying market.

By January 22, the flow picture was visibly mixed. CoinDesk reported that BlackRock’s IBIT and Fidelity’s FBTC had each exceeded $1 billion in assets under management after launch, while GBTC had experienced multibillion-dollar outflows. The distinction matters: gross inflows to new funds could coexist with net selling from a pre-existing pool of GBTC shareholders.

A separate CoinDesk report published January 22 attributed a large part of GBTC’s early exodus to the FTX bankruptcy estate. It said private data reviewed by the newsroom and two people familiar with the matter showed the estate had sold 22 million GBTC shares, taking its holding to zero, for close to $1 billion. That was a contemporaneous reported claim, not a transaction total independently established here from an exchange tape or court accounting. The report also did not prove that all proceeds became spot bitcoin sales or that FTX alone caused the January 22 price move.

What the January 22 record supports

The strongest conclusion is narrower than the market narrative. Coinbase data establish that BTC-USD closed the January 22 UTC session 4.88% below its open and below $40,000. Reuters independently captured the breach during U.S. hours. SEC records establish the institutional change that preceded it, and contemporaneous reporting documents the competing fund-flow explanation participants were considering.

Price action cannot identify each seller or measure how much GBTC redemption activity reached spot venues. The January 22 decline therefore showed that ETF access did not remove short-term selling pressure; it did not establish that the products had failed, that one estate caused the market, or where bitcoin would trade after January 22.