Crypto millionaire James Fickel has suffered losses exceeding $43 million since Jan. 10, as his debt on the decentralized lending platform Aave surged to $132 million.
Fickel, an early Ethereum investor and the founder of longevity research firm Amaranth Foundation lost over $43.7 million by essentially betting on Ether’s price (ETH) against Bitcoin (BTC).
Based on the millionaire’s 2024 investments, Fickel expected Ether price to rise against Bitcoin’s when he first borrowed $172 million worth of Wrapped Bitcoin (WBTC) on Jan. 10, according to a Sept. 14 X post by Lookonchain.
“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 16,000 $ETH for 671 $WBTC($39.9M) at $0.042 to repay the debt on #Aave.”
Source: Lookonchain
Since the start of 2024, Ether has underperformed compared to Bitcoin. According to Binance data, Ether’s price relative to Bitcoin has dropped by more than 24% year-to-date (YTD) and over 9% in the past month.
ETH/BTC, year-to-date chart. Source: TradingView
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Fickel has a $123 million Aave debt
Fickel’s debt on the decentralized lending platform Aave reached over $132 million worth of WBTC as of Sept. 14, according to Debank data
His increasing debt stems from his earlier belief that Ether would outperform Bitcoin. By borrowing Bitcoin to purchase Ether, he effectively took a short position on Bitcoin. However, as Ether’s price dropped relative to Bitcoin, this strategy resulted in his losses.
James Fickel Aave loan. Source: Debank
Fickel is widely known for investing $400,000 into Ether when it was only worth $0.80.
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Ether ETFs continue to bleed as Grayscale’s ETHE surpasses $2.7b outflows
The continuous outflows from the US Ether exchange-traded funds (ETFs) are contributing to Ether’s sluggish price action.
The ETH ETFs have recorded a cumulative $581 million worth of negative net outflows, since they debuted for trading on July 23. Grayscale’s ETF accounted for the majority, or over $2.7 billion worth of net outflows, according to Farside Investors data.
Ethereum ETF Flow (USD, million). Source: Farside Investors
Investors anticipated a significant price increase from the launch of the Ether ETFs. For Bitcoin, ETFs accounted for about 75% of new investment in the cryptocurrency by Feb. 15 as it surpassed the $50,000 mark.
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