• James Fickel lost over $43 million since January due to Ether’s underperformance against Bitcoin.  
  • Fickel’s debt on Aave surged to $132 million after borrowing $172 million in Wrapped Bitcoin, expecting Ether to outperform.  
  • U.S. Ether ETFs recorded $581 million in net outflows since July 23, contributing to Ether’s sluggish performance.  

Crypto millionaire James Fickel has lost a substantial amount of money, more than $43 million Since January 10. Consequently, his debt reached $132 million on the decentralized lending platform Aave. 

Fickel, who founded the longevity research organization Amaranth Foundation and is well-known for his early Ethereum investments, had placed a wager on Ether’s price increase versus Bitcoin. This tactic has not worked out as planned.

James Fickel( @jamesfickel ) lost ~18,000 $ETH ($43.7M) by going long the BTC/ETH trading pair!

From Jan 10 to July 1, he borrowed 3,061 $WBTC (172M) from #Aave and exchanged it for 56,445 $ETH at a rate of 0.05424.

Since Aug 7, he spent 12M $USDC to buy 211 $WBTC and exchanged… pic.twitter.com/9DgLjisPgp

— Lookonchain (@lookonchain) September 14, 2024

Bet on Ether Backfires

Notably, Fickel’s strategy included taking out a $172 million Wrapped Bitcoin (WBTC) loan in the hope that Ether would gain value in relation to Bitcoin. His 2024 investments, which were predicated on a better performance for Ether, served as the foundation for this plan. 

Sadly for Fickel, Ether’s performance this year has lagged behind that of Bitcoin. Based on data from Binance, the price of Ether has decreased by over 24% year-to-date and over 9% over the last month in relation to Bitcoin. His debt has increased to $132 million as a result of this decline, which has had a substantial impact on his standing on Aave.

Aave Debt Mounts

Furthermore, the mounting debt serves as a warning about the dangers of shorting Bitcoin in anticipation of Ether’s rise. Fickel essentially established this position by choosing to borrow Bitcoin in order to buy Ether. 

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Hence, he suffered large losses as the price of Ether dropped in comparison to Bitcoin. His initial Ether investment, at a time when the coin was only worth $0.80, had proven profitable. But the state of affairs right now emphasizes how erratic the cryptocurrency market is.

Impact of Ether ETF Outflows

Notably, one reason for Ether’s poor performance is the ongoing withdrawals from the U.S.-based Ether exchange-traded funds (ETFs). Since they opened for trading on July 23, these ETFs have seen negative net outflows of $581 million in total. 

Moreover, based on information provided by Farside Investors, Grayscale’s ETF alone was responsible for more than $2.7 billion in net outflows. With the introduction of Ether ETFs, investors had expected a large price increase, but this hasn’t happened. By February 15, when Bitcoin crossed the $50,000 threshold, Bitcoin ETFs constituted about 75% of fresh investment in the cryptocurrency.

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