Ethereum is falling.
James Fickel, founder of the Amaranth Foundation, lost R$240 million betting that Ethereum would appreciate more than Bitcoin. The bet was made through a long position in the ETH/BTC pair opened at the beginning of the year.
Ironically, the millionaire reportedly built his fortune by being an early investor in Ethereum, which also helps explain his passion for the currency.
One of the reasons why this bet went wrong was the American ETFs. This is because Bitcoin was very well received on Wall Street, while Ethereum did not attract as much attention from the traditional market.
Ethereum ETFs have seen more outflows than inflows since their initial public offerings. Source: SoSoValue.
Furthermore, Ethereum’s strong competition in the “smart blockchain” sector is another point to consider. On the other hand, Bitcoin, seen as a digital gold, has no competitors.
Millionaire loses R$240 million betting on Ethereum
Just like Bitcoin, Ethereum has created several millionaires who believed in the project. One of them was Alexis Ohanian, co-founder of Reddit, who turned R$55,000 into R$93 million, another was James Fickel, founder of the Amaranth Foundation.
While Ohanian has since dumped some of those ethers, Fickel remained a firm believer in the project and earlier this year bet millions that Ethereum would outperform Bitcoin.
This bet, however, backfired, as ETH has lost 26.5% of its value against BTC since then.
“James Fickel lost around 18,000 ETH ($43.7 million) betting on the rise of the ETH/BTC trading pair.”
“From January 10 to July 1, he borrowed 3,061 WBTC ($172 million) on Aave and exchanged it for 56,445 ETH at a rate of 0.05424,” analytics firm Lookonchain commented. “Since August 7, he has spent $12 million in USDC to buy 211 WBTC and exchanged 16,000 ETH for 671 WBTC ($39.9 million) at a rate of 0.042 to pay off the debt on Aave.”
“He currently has 2,196 WBTC ($132 million) in debt on Aave, having lost a total of approximately 18,000 ETH ($43.7 million)!”
Ethereum is at break-even against the US dollar in 2024, but losing 26.5% against Bitcoin. Source: TradingView.
This Sunday (15), another Ethereum investor moved his coins for the first time in 8 years, transforming an investment of R$282 thousand into R$211 million. Despite the profit, the movement could signal a moment of weakness for ETH, being abandoned even by former whales.
