Crypto millionaire James Fickel has lost over $43 million since January 10 due to a risky trading strategy involving Ether and Bitcoin.
Fickel, an early Ethereum investor and founder of the longevity research firm Amaranth Foundation, initially borrowed $172 million worth of Wrapped Bitcoin (WBTC) on the decentralized lending platform Aave, expecting Ether to outperform Bitcoin.
However, Ether has significantly underperformed Bitcoin throughout 2024.
Binance data shows that Ether’s price relative to Bitcoin has dropped more than 24% year-to-date, with a 9% decline in the past month alone. As a result, Fickel’s debt on Aave surged to $132 million by September 14, according to Debank data.
Fickel’s strategy, which involved borrowing Bitcoin to purchase Ether, essentially amounted to a short position on Bitcoin.
As Bitcoin’s value strengthened against Ether, Fickel’s bet led to significant losses, further compounding his debt.
