High-profile cryptocurrency investor James Fickel has found himself in the red, suffering losses upwards of $43 million over the better part of 2024. Fickel’s unfortunate circumstances are a result of a lavish gamble gone wrong, betting on the price of Ether to rise against Bitcoin since the start of the year.
In this sizable transaction, Fickel borrowed $172 million worth of Wrapped Bitcoin (WBTC) from Aave, a decentralized lending platform, to fund his bet on Ether. Since making that move, Ether fell behind, underperforming when compared to Bitcoin, contributing to Fickel’s sizable loss as Ether’s value dropped 24% year-to-date and 9% over the past month.
Today, he finds himself in a debt hole of $132 million on the Aave platform due to his optimistic wager on Ether. Fickel initially purchased Ether on the belief that it would outperform Bitcoin, using borrowed Bitcoin funds to make his Ether purchases, a short position on Bitcoin which didn’t pay off due to Ether’s drop in value.
However, despite this setback, Fickel remains a notable figure in the world of cryptocurrency for his early investment of $400,000 in Ether when its value was a mere $0.80.
Adding to Ether’s sluggish performance, it continues to experience substantial outflows from the US Ether exchange-traded funds (ETFs), further impacting its value. As of now, the Ether ETFs, led by Grayscale’s ETHE, have seen a negative net outflow of $581 million since July 23, with Farside Investors data showing Grayscale responsible for over $2.7 billion worth of such outflows. These figures present a stark contrast to the industry’s expectations of the Ether ETFs spurring a significant price increase.