James Fickel, one of the world's richest crypto investors, is saddled with a huge debt of $103 million due to his strong belief in Ethereum.
Crypto millionaire loses $43 million betting on ETH. Photo: Decrypt
Fickel owes $103 million on AAVE
James Fickel, an early investor in Ethereum and founder of longevity research firm Amaranth Foundation, still owes $103 million to lending platform AAVE.
Since early 2024, Fickel has borrowed $172 million in Wrapped Bitcoin (WBTC) and converted them into Ethereum, hoping that the price of ETH will increase more than BTC. However, life is not as dreamy as it seems, the price of ETH has been significantly weaker than BTC, leading to a loss of more than $43.7 million. After that, Fickel had to spend another $12 million to buy a portion of WBTC to reduce the debt on AAVE.
James Fickel( @jamesfickel ) lost ~18,000 $ETH ($43.7M) by going Longing the BTC/ ETH trading pair!
— Lookonchain (@lookonchain) September 14, 2024
From Jan 10 to July 1, he borrowed 3,061 $WBTC (172M) from # AAVE and exchanged it for 56,445 $ETH at a rate of 0.05424.
Since Aug 7, he spent 12M $ USDC to buy 211 $WBTC and exchanged… pic.twitter.com/9DgLjisPgp
According to data from Debank , as of September 14, Fickel still owed 1,758 WBTC ($103 million) on AAVE. The strategy of shorting Bitcoin to buy Ethereum is causing serious losses for Fickel.
James Fickel's WBTC loan on AAVE as of noon 09/16/2024. Source: Debank
Ethereum has also underperformed Bitcoin for much of the year. ETH is currently trading at $2,279, down more than 5% over the past 24 hours.
The ETH/ BTC exchange rate has also dropped 25% year-to-date and 9% over the past month. Taking data from Binance, the ETH/ BTC exchange rate has dropped below 0.04, hitting its lowest level since April 20, 2021, temporarily recorded at 0.03899. The historical peak of this exchange rate was 0.1238 in January 2018 and the record low of 0.01615 fell in September 2019.
ETH/ BTC rate on 15m frame on Binance exchange at 11:25 AM on 09/16/2024
James Fickel is famous for investing $400,000 in ETH when its price was just $0.8 per coin.
For the uninitiated pic.twitter.com/y1GEQIBQNa
— Set Animals (@setanimals) September 14, 2024
According to Arkham Intelligence , Fickel's labeled wallet addresses are holding $350 million in assets. 99.9% of the assets are AETHWSTETH, the rest are other coins such as ETH, USDC, OP, which are only worth a few tens of thousands of dollars.
James Fickel's crypto assets statistics. Source: Arkham (September 16, 2024)
Ethereum ETF Continues to Be “ Capital”
Another factor pushing ETH prices down is the continuous outflow of money from Ethereum ETFs. Since their launch on July 23 , ETH ETFs have seen a total of $581 million in outflows. Grayscale’s ETF in particular has accounted for more than $2.7 billion in Capital , according to data from Farside Investors.
This is in stark contrast to investors’ expectations that ETH prices would surge thanks to the emergence of ETFs. Meanwhile, Bitcoin ETFs attracted up to 75% of new investment when Bitcoin prices surpassed the $50,000 mark in February.
Statistics on inflow/outflow of Ethereum ETFs. Source: Farside Investors (September 16, 2024)
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