James Fickel, one of the wealthiest cryptocurrency investors and founder of the Amaranth Foundation, has faced substantial losses amounting to over $43 million since January 2024. Fickel, who holds more than $4.8 million in Ether, took a calculated risk by betting on Ether’s price increase against Bitcoin, a move that has proven costly.
Source: Lookonchain
On January 10, Fickel borrowed 3,061 Wrapped Bitcoin (WBTC) worth $172 million on the decentralized lending platform Aave. He exchanged this for 56,445 Ether at a rate of 0.05424 BTC per ETH. However, Ether has significantly underperformed compared to Bitcoin this year, dropping by more than 24% against Bitcoin year-to-date.
Debt Soars to $132 Million on Aave
As Ether’s price continued to decline, Fickel’s strategy backfired. His debt on Aave has now ballooned to over $132 million as of September 14, driven by his belief that Ether would eventually outperform Bitcoin. Fickel’s position was essentially a short on Bitcoin, and the price drop in Ether has forced him into losses exceeding $43.7 million.
ETH/BTC, year-to-date chart. Source: TradingView
To address this, Fickel has repaid some of the debt by spending $12 million in USDC to buy 211 WBTC and exchanging 16,000 Ether for 671 WBTC, valued at $39.9 million.
Ether ETFs Struggle with Outflows
Ether’s poor performance has also been reflected in the broader market. Since the launch of Ether exchange-traded funds (ETFs) on July 23, the funds have recorded a cumulative $581 million in net outflows. Grayscale’s ETF alone has experienced over $2.7 billion in outflows, dampening hopes of a significant price increase for Ether.
James Fickel Aave loan. Source: Debank
While Bitcoin’s ETF launch earlier this year saw a surge in investment, with the price surpassing $50,000, Ether has struggled to follow suit, contributing to Fickel’s ongoing financial difficulties.
