Crypto-Millionaire Loses 43 Million Betting Against Bitcoin
Crypto-millionaire James Fickel, known for his aggressive trading, lost millions betting on the appreciation of Ether against Bitcoin.
James Fickel is a crypto-millionaire who is rather well known for his risky investment strategies. He made headlines years ago when he invested an impressive $400,000 in Ethereum, at a time when the cryptocurrency was trading at 1 ETH at 80 cents. Needless to stress how well that transaction worked out for him. Fickel, however, is not one to be satisfied with a single investment, and has continued to move, rather unscrupulously.
Naturally, not every insight of the crypto-millionaire has been confirmed by the market. When you invest, you know, you may or may not make money, and Fickel probably won't remember 2024 as a particularly good year for his finances.
Significant losses
On 10 January 2024, Fickel went back to investing in Ethereum, the cryptocurrency that made him rich and gave him the opportunity to become an entrepreneur, founding Amaranth Foundation, a neuroscience company. This time, however, he has taken a very risky position.
His idea was that Ether would outperform Bitcoin from January onwards, which, however, never happened. The crypto-millionaire's gamble was to think that the value of ETH would rise, mainly to the detriment of the queen of cryptocurrencies. Ethereum's infrastructure, which also had a banner year, culminating with the launch of ETFs on the Wall Street Exchange, failed to be as successful as Fickel expected. Although it had a half-year with sparse better moments than BTC (which paid for the sharp swings in August), Ether's comeback was not even close to what the investor had imagined.
All in all, the eight months that followed the January deal saw Bitcoin defend itself well and Ether struggle to keep up. The swings that limited BTC also clipped ETH's wings, and the estimate over the six months shows that Ether lost value against Bitcoin, as much as 24% at its worst.
James Fickel's Debt
James Fickel's shortfall amounts to 43.7 million, due to his miscalculation on the ETH/BTC trading pair. The investment he put on the plate involved borrowing 3,061 wrapped Bitcoins (worth $172 million in January) from the AAVE platform and immediately traded them for 56,445 ETH, at a rate of 0.05424. From 7 August onwards, when he started to pay off his debt to the exchange, he spent $12 million to buy 211 WBTC (Wrapped Bitcoin) and traded 16 thousand of his Ether for another 671 WBTC.
James Fickel(@jamesfickel) lost ~18,000 $ETH($43.7M) by going long the BTC/ETH trading pair!
From Jan 10 to July 1, he borrowed 3,061 $WBTC(172M) from #Aave and exchanged it for 56,445 $ETH at a rate of 0.05424.
Fickel will need another 2,196 WBTC to settle his shortfall with AAVE. The investment he has pursued has not paid off at all; in fact, it has proved to be a major washout. His position on Bitcoin's rapid depreciation (which in the jargon is called ashort) proved to be completely wrong. This inevitably resulted in him making large losses.
Like numerous other investors, the crypto-millionaire expected ETH's value to soar after its launch on Wall Street, just as BTC did a few months ago. It didn't happen that way, however, and many are coming out of it with broken bones.
Subscribe to the SpazioCrypto newsletter to keep up with the latest news from the world of Web3 and decentralised finance.
James Fickel is a crypto-millionaire who is rather well known for his risky investment strategies. He made headlines years ago when he invested an impressive $400,000 in Ethereum, at a time when the cryptocurrency was trading at 1 ETH at 80 cents. Needless to stress how well that transaction worked out for him. Fickel, however, is not one to be satisfied with a single investment, and has continued to move, rather unscrupulously.
Naturally, not every insight of the crypto-millionaire has been confirmed by the market. When you invest, you know, you may or may not make money, and Fickel probably won't remember 2024 as a particularly good year for his finances.
Significant losses
On 10 January 2024, Fickel went back to investing in Ethereum, the cryptocurrency that made him rich and gave him the opportunity to become an entrepreneur, founding Amaranth Foundation, a neuroscience company. This time, however, he has taken a very risky position.
His idea was that Ether would outperform Bitcoin from January onwards, which, however, never happened. The crypto-millionaire's gamble was to think that the value of ETH would rise, mainly to the detriment of the queen of cryptocurrencies. Ethereum's infrastructure, which also had a banner year, culminating with the launch of ETFs on the Wall Street Exchange, failed to be as successful as Fickel expected. Although it had a half-year with sparse better moments than BTC (which paid for the sharp swings in August), Ether's comeback was not even close to what the investor had imagined.
All in all, the eight months that followed the January deal saw Bitcoin defend itself well and Ether struggle to keep up. The swings that limited BTC also clipped ETH's wings, and the estimate over the six months shows that Ether lost value against Bitcoin, as much as 24% at its worst.
James Fickel's Debt
James Fickel's shortfall amounts to 43.7 million, due to his miscalculation on the ETH/BTC trading pair. The investment he put on the plate involved borrowing 3,061 wrapped Bitcoins (worth $172 million in January) from the AAVE platform and immediately traded them for 56,445 ETH, at a rate of 0.05424. From 7 August onwards, when he started to pay off his debt to the exchange, he spent $12 million to buy 211 WBTC (Wrapped Bitcoin) and traded 16 thousand of his Ether for another 671 WBTC.
The Reasons for the crypto millionaire's error
Fickel will need another 2,196 WBTC to settle his shortfall with AAVE. The investment he has pursued has not paid off at all; in fact, it has proved to be a major washout. His position on Bitcoin's rapid depreciation (which in the jargon is called ashort) proved to be completely wrong. This inevitably resulted in him making large losses.
Like numerous other investors, the crypto-millionaire expected ETH's value to soar after its launch on Wall Street, just as BTC did a few months ago. It didn't happen that way, however, and many are coming out of it with broken bones.
Subscribe to the SpazioCrypto newsletter to keep up with the latest news from the world of Web3 and decentralised finance.
Read Next
BlackRock Chose Bitcoin Over Traditional Assets. What is the Reason?
BlackRock provided reasons for the rise of Bitcoin, calling it an attractive asset.
Miners are Getting Better. What's Happening in the Cryptocurrency Mining Market?
The economics of bitcoin mining improved in the first half of November, JPMorgan calculated.
MicroStrategy Acquired Bitcoin Worth $4.6 Billion, How Many Coins Does It Hold?
The new batch of bitcoins became the largest ever purchase by Michael Saylor's company.
The Solana Cryptocurrency has Updated the Historical High of the Last Three Years. What is the Reason for the Growth?
The price of the SOL token rose by about 6 per cent from the previous all-time high.