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Crypto millionaire loses $43 million in Ethereum trading bet

GrafaGrafa2024/09/15 22:05
By:Liezl Gambe

James Fickel, a crypto millionaire known for his early investments in Ethereum (CRYPTO:ETH), has faced substantial losses after a bold bet on Ethereum's performance against Bitcoin (CRYPTO:BTC) in 2024 went awry. 

Fickel's high-risk strategy has resulted in over $43 million in losses and accumulated a staggering $132 million in debt.

Fickel's troubles began in January when he took a significant risk, betting that Ethereum would outperform Bitcoin throughout 2024. 

To finance this strategy, he secured a $172 million loan of Wrapped Bitcoin (CRYPTO:WBTC) from Aave, a decentralised crypto lending platform. 

With the borrowed funds, Fickel purchased 56,445 ETH at a rate of 0.05424 BTC per ETH, anticipating that Ethereum would gain value relative to Bitcoin.

Unfortunately for Fickel, Bitcoin's performance has outshined Ethereum's this year, largely due to the successful launch of Spot Bitcoin ETFs in the United States. 

While Spot Ethereum ETFs have also entered the U.S. market, they have not matched Bitcoin ETFs in terms of inflows, leading to a significant lag in Ethereum's price growth. 

According to data from TradingView, the ETH/BTC pair has dropped by over 34% since January 11, putting Fickel's strategy in jeopardy.

By August 7, it became evident that his bet would likely not succeed. 

In an effort to mitigate his mounting losses, Fickel used $12 million in USDC to purchase 211 WBTC and traded 16,000 ETH for another 671 WBTC to repay a portion of his debt on Aave. 

Despite these efforts, he still owes 2,196 WBTC, equivalent to about $132 million.

Based on on-chain data from Lookonchain, Fickel's losses amount to approximately 18,000 ETH, valued at around $43.7 million, since the start of the year. 

Known as one of the largest individual holders of Ethereum, Fickel's current situation is a stark reminder of the volatility and risks inherent in the crypto market.

At the time of reporting, the Ethereum (ETH) price was $2,367.06, and the Bitcoin (BTC) price was $59,840.07.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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