James Fickel, a prominent cryptocurrency investor, has lost over $43 million in a high-stakes trading bet involving Ether (ETH) and Bitcoin (BTC).
Known for his early investment in Ethereum, Fickel made the bold decision to borrow Wrapped Bitcoin (WBTC) and trade it for Ether, betting that the price of Ether would outperform Bitcoin this year.
Fickel, who initially borrowed $172 million in WBTC from the decentralized lending platform Aave in January, converted the funds into 56,445 Ether at a favourable exchange rate.
However, Ether’s price has steadily declined against Bitcoin since the start of 2024. As a result, Fickel’s bet has backfired, and his debt on Aave has ballooned to $132 million.
According to data from Binance, Ether has dropped by more than 24% compared to Bitcoin this year, with a 9% decline just in the past month. Fickel’s strategy essentially placed him in a short position against Bitcoin, a move that proved costly as Bitcoin’s price remained strong while Ether struggled.
Despite the setback, Fickel remains one of the wealthiest crypto investors, currently holding $4.8 million worth of Ether. His initial investment in Ethereum, when the cryptocurrency was valued at just $0.80, had once turned him into a millionaire. However, his recent losses serve as a cautionary tale about the volatility and risks of crypto trading.
The broader market has also seen challenges, with Ether ETFs (exchange-traded funds) experiencing significant outflows. Since their launch in July, these ETFs have recorded $581 million in negative net outflows, contributing to Ether’s lacklustre price performance.
