James Fickel loses $43.7M in a failed Bitcoin-Ether trade, highlighting ETH's underperformance against BTC.
Massive $132M debt on Aave pushes James Fickel to sell ETH and buy Bitcoin, realizing huge losses.
Ether’s 24% year-to-date decline against Bitcoin contributed to James Fickel’s multi-million dollar losses.
James Fickel, one of the wealthiest cryptocurrency investors, has lost over $43 million in a failed bet on the BTC/ETH trading pair. Fickel’s strategy, which began in early 2024, involved borrowing Wrapped Bitcoin (WBTC) on the decentralized platform Aave and exchanging it for Ether (ETH). However, Ether's underperformance compared to Bitcoin this year has led to significant losses. His debt on Aave has ballooned to $132 million, forcing him to take further steps to manage his position.
https://twitter.com/lookonchain/status/1834849876171276389 Massive Borrowing and Exchange Strategy
Starting from January 10, Fickel borrowed 3,061 WBTC, valued at $172 million, through Aave. He exchanged this for 56,445 ETH at a rate of 0.05424 BTC per ETH, anticipating a rise in Ether’s price against Bitcoin. His investment strategy was based on the expectation that Ether would outperform Bitcoin over time.
However, Ether has significantly underperformed against Bitcoin in 2024, leading to a 24% year-to-date (YTD) decline relative to Bitcoin. This downturn created mounting pressure on Fickel’s strategy, increasing the cost of his debt and forcing further asset reallocations.
Attempts to Reduce Debt Amid Market Pressure
As Ether continued to underperform, Fickel made additional moves to reduce his debt obligations on Aave. Since August 7, he spent $12 million in USDC to buy 211 WBTC and exchanged 16,000 ETH for 671 WBTC, valued at $39.9 million, to repay part of his Aave debt.
Despite these efforts, Fickel's Aave debt remains substantial, currently standing at 2,196 WBTC, worth approximately $132 million. Ether’s continued decline relative to Bitcoin added more pressure to his position, resulting in significant realized losses.
Ether’s Underperformance Drives Losses
The key factor behind Fickel's loss stems from the persistent underperformance of Ether against Bitcoin in 2024. Since the start of the year, Ether has dropped by more than 24% compared to Bitcoin. As of recent, Bitcoin price is $59,721.36, while Ether is trading at $2,416.
The declining ETH/BTC ratio made Fickel’s earlier borrow-and-exchange strategy increasingly costly. As of now, Fickel has lost around 18,000 ETH, amounting to approximately $43.7 million, as his initial expectations of Ether’s price movement against Bitcoin failed to materialize.
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