Crypto millionaire James Fickel has faced a staggering loss of over $43 million since January 10, following a risky trading bet on Ether’s price movement against Bitcoin. His debt on the decentralized lending platform Aave has now ballooned to $132 million, according to the latest reports.
Fickel, an early investor in Ethereum and the founder of the Amaranth Foundation, began his ill-fated investment strategy in early 2024 by borrowing $172 million worth of Wrapped Bitcoin (WBTC) on January 10. He then exchanged the borrowed funds for 56,445 Ether (ETH) at a rate of 0.05424, expecting Ether’s value to outperform Bitcoin.
However, Ether has underperformed against Bitcoin this year, dropping over 24% year-to-date, with further declines of 9% in the past month alone. As a result, Fickel’s debt on Aave grew, forcing him to sell 16,000 ETH for 671 WBTC and spend $12 million in USDC to manage his repayments, according to data shared by Lookonchain.
Fickel’s growing debt stems from his strategy of borrowing Bitcoin to buy Ether, effectively betting against Bitcoin. As Ether continued to decline relative to Bitcoin, his losses mounted, resulting in a current debt of $132 million on Aave.
Meanwhile, Ether’s price struggles continue amid a significant outflow from Ether exchange-traded funds (ETFs). Since their launch in July, these ETFs have seen a negative net outflow of $581 million, with Grayscale’s Ether fund alone recording outflows of $2.7 billion, further weighing down Ether’s market performance.
This dramatic loss has once again highlighted the volatility and risk associated with cryptocurrency trading, even for seasoned investors like Fickel, who once bought Ether at just $0.80 per coin.