- James Fickel lost $43.7M in BTC/ETH trades, highlighting how volatile market conditions can hit even top crypto investors hard.
- Despite his expertise, Fickel’s $132M debt and $43.7M loss show the risks of betting on ETH when market conditions shift.
- Ethereum’s underperformance and ETF outflows contributed to James Fickel’s staggering $43.7M loss in the BTC/ETH trading pair.
James Fickel, the world’s fifth-largest crypto investor, has faced losses due to volatility in the BTC/ETH trading pair. Using a high-risk Ethereum (ETH) and Wrapped Bitcoin (WBTC) trading strategy, Lookonchain says that Fickel lost about $43.7 million, or 18,000 ETH.
A High-Stakes Strategy Gone Wrong
Fickel’s venture began on January 10, when he borrowed 3,061 WBTC, worth around $172 million, from Aave. He exchanged this WBTC for 56,445 ETH at an initial rate of 0.05424. The market conditions were initially favorable, but they shifted dramatically, leading to his current predicament.
From August 7, Fickel attempted to recover his losses. He spent $12 million USDC to buy 211 WBTC and then exchanged 16,000 ETH for 671 WBTC, valued at $39.9 million. The exchange rate of 0.042 ETH/BTC was unfavorable, exacerbating his losses. Consequently, he now holds a debt of 2,196 WBTC, totaling $132 million.
Impact of Ethereum’s Underperformance
Despite his extensive crypto holdings, Fickel’s investments are locked due to his debt. His remaining $400 million worth of crypto is in Ethereum derivatives, which are currently underperforming. With the cryptocurrency’s launch on July 23, withdrawals of $581 million from Ethereum ETFs have made its price issues worse.
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Ethereum is at $2,417, up from $2,352 on New Year’s Day. By comparison, Bitcoin has outperformed Ethereum and now trades at a premium of more than 40% on its January level. The ETH/BTC ratio slumped 22% over the past three months, and on September 11 it reached a multi-year low of 0.04057.
The decreasing demand for Ether relative to Bitcoin is evident. Bitcoin ETFs have gained more traction compared to spot Ethereum ETFs, contributing to Ether’s sluggish price action. The continuous outflows from ETH ETFs further reflect this trend, highlighting how volatility and market dynamics can affect even seasoned investors.
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