It’s crazy that famous cryptocurrency investor James Fickel lost more than $43 million when his high-stakes bet on Ether against Bitcoin lost. Fickel, a well-known person in the crypto space and the founder of the Amaranth Foundation, bet that Ethereum (ETH) would do better than Bitcoin (BTC) in 2024. However, his risk has put him in more and more debt.
On January 10, Fickel borrowed $172 million worth of Wrapped Bitcoin (WBTC) because he thought the price of Ether would go up compared to Bitcoin.
Fickel already has over $4.8 million worth of Ether. But since the beginning of 2024, Ether hasn’t done as well as Bitcoin. According to Binance data, it has dropped more than 24% year-to-date (YTD) and over 9% in the last month.
Fickel’s situation has gotten a lot worse because Ether hasn’t been performing well. As of September 14, his debt on the decentralized lending site Aave had grown to $132 million, according to data from Debank.
Fickel’s business plan was to borrow Bitcoin to buy Ether, which was the same thing as selling Bitcoin short while betting that Ether would go up in value. The opposite actually happened, which caused losses reaching $43.7 million. Fickel’s debt has grown because Ether’s value has dropped a lot against Bitcoin, making his money problems worse.
Crypto ETFs Suffer Massive Outflows, Adding To Fickel’s Losses Amid Market Stress
The loses happen at a time when the cryptocurrency market as a whole is under a lot of stress, especially Ethereum. Since they started, exchange-traded funds (ETFs) that focus on Ether have continued to lose a lot of money. Since July 23, when they first started trading, U.S.-based Ether ETFs have lost a total of $581 million.
Over $2.7 billion has been taken out of Grayscale’s Ether ETF alone, which has made Ether’s results slow.
At first, investors thought that the release of Ether ETFs would lead to a rally like the one seen in Bitcoin ETFs earlier this year.
By mid-February, about 75% of all new Bitcoin purchases were in Bitcoin ETFs. Even with these hopes, Ether’s price has been struggling, which has made Fickel’s loses even worse.
Right now, Fickel has to deal with a $123 million bill on Aave, and Ether is still having a hard time competing with Bitcoin’s strength. Even experienced investors should be aware of the high risk and volatility in cryptocurrency trade after seeing how much he lost.
