James Fickel, an early Ethereum investor and crypto millionaire, has lost over $43 million since January 10, 2024. His debt on the decentralised lending platform Aave has now reached $132 million. Fickel had borrowed heavily on Aave, betting that Ether would rise in value compared to Bitcoin. Unfortunately, the market didn’t move in his favour.
Betting on Ether Over Bitcoin
Fickel, who is also the founder of longevity research firm Amaranth Foundation, started his risky strategy by borrowing $172 million worth of Wrapped Bitcoin (WBTC) in January. He then traded it for 56,445 ETH, expecting Ether to outperform Bitcoin in 2024. However, the opposite happened. Since the beginning of the year, Ether has dropped in value against Bitcoin.
Loan Details and Market Performance
According to a post from blockchain tracker Lookonchain on September 14, Fickel’s loan positions have been under pressure as Ether’s price underperformed:
– Between January 10 and July 1, he borrowed 3,061 WBTC (worth $172 million) on Aave.
– He traded it for 56,445 ETH at a rate of 0.05424.
– Since August 7, Fickel has spent $12 million USDC to buy 211 WBTC and traded 16,000 ETH for 671 WBTC, worth $39.9 million.
This was part of his effort to repay the growing debt on Aave.
Ether’s Underperformance
So far in 2024, Ether has struggled compared to Bitcoin. Data from Binance shows that Ether’s value against Bitcoin has fallen by more than 24% year-to-date, with a 9% drop in the past month alone. Fickel’s bet on Ether’s rise backfired, leading to his massive debt.
Fickel is known for his early investment in Ethereum, having bought $400,000 worth of Ether when it was priced at just $0.80. However, his recent strategy of shorting Bitcoin to buy Ether has cost him dearly, leaving him with $132 million in debt and millions in losses.
