James Fickel, one of the wealthiest cryptocurrency investors in the world, is now burdened with a massive debt of 103 million USD, stemming from his strong conviction in the future of Ethereum.

James Fickel's Crypto Asset Report

As an early Ethereum investor and founder of the longevity research organization, Amaranth Foundation, Fickel currently owes 103 million USD to the lending platform Aave.

Earlier in 2024, Fickel borrowed 172 million USD in Wrapped Bitcoin (WBTC) and converted it to Ethereum, believing ETH’s price would outperform Bitcoin. However, things did not go as planned, as Ethereum has drastically underperformed against Bitcoin, resulting in a loss of over 43.7 million USD. To reduce his debt on Aave, he had to spend an additional 12 million USD to buy back some of the WBTC.

According to Debank, as of September 14th, Fickel still owes 1,758 WBTC (equivalent to 103 million USD) on Aave. His strategy of shorting Bitcoin to buy Ethereum has caused considerable financial damage.

For most of this year, Ethereum has consistently underperformed against Bitcoin. ETH is currently priced at 2,279 USD, having dropped by more than 5% in the past 24 hours alone.

The ETH/BTC exchange rate has fallen by 25% since the start of the year, with a 9% drop in the last month alone. Data from Binance shows that the ETH/BTC rate has dipped below 0.04, marking its lowest level since April 20, 2021, temporarily recording a rate of 0.03899. Historically, this rate reached its peak at 0.1238 in January 2018, while its lowest point was 0.01615 in September 2019.

According to Arkham Intelligence, wallets attributed to Fickel currently hold assets worth 350 million USD, with 99.9% of these assets being in AETHWSTETH. The remaining assets, including ETH, USDC, and OP, are only worth a few tens of thousands of dollars.

Another factor contributing to Ethereum’s price decline is the continuous withdrawal of funds from Ethereum ETFs. Since their launch on July 23rd, ETH ETFs have experienced a total of 581 million USD in outflows. Notably, Grayscale’s ETF alone accounted for more than 2.7 billion USD of these withdrawals, according to Farside Investors.

This situation starkly contrasts with investors’ expectations, who had hoped that the introduction of ETFs would drive ETH prices higher. Meanwhile, Bitcoin ETFs attracted 75% of new investments as Bitcoin surpassed the 50,000 USD mark in February.

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