Crypto millionaire and early Ethereum investor James Fickel has reported losses exceeding $43 million since January 2024. The cause is his investments on the decentralized lending platform Aave, where his debt has reached $132 million.
Significant Losses Since the Beginning of the Year
James Fickel, the founder of longevity research firm Amaranth Foundation, lost over $43 million by betting on Ether's price rising against Bitcoin. In January 2024, he borrowed $172 million worth of Wrapped Bitcoin (WBTC) on the Aave platform and used it to purchase 56,445 ETH at a rate of 0.05424. However, Ether's price relative to Bitcoin has dropped by 24% year-to-date.
Debts on the Aave Platform
As of September 14, 2024, Fickel's debt on the Aave platform has risen to $132 million in WBTC. The losses are attributed to his expectation that Ether would outperform Bitcoin. By borrowing Bitcoin to purchase Ether, he essentially took a short position on Bitcoin. The fall in Ether's price led to substantial losses.
Effect on Ether ETF
The continuous outflows from US Ether ETFs are also contributing to Ether’s sluggish price action. Since the launch of ETF trading on July 23, cumulative net outflows have totaled $581 million. Grayscale’s ETF has shown the most significant outflows, exceeding $2.7 billion.
James Fickel continues to face significant losses due to the drop in Ether's price relative to Bitcoin. Rising debt on the Aave platform and ongoing outflows from Ether ETFs exacerbate the situation.
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