BTCS Sells Ether at a Loss to Protect $64M Aave Loan as ETH Falls
Nasdaq-listed Ethereum treasury firm BTCS sold ETH below its cost basis to manage a $64.1 million Aave borrowing position, according to its November 12 SEC filing. The company says it has not faced any liquidation, but its estimated liquidation price sits roughly 11% below where ETH traded on November 13.
Written by CoinArticle’s AI Newsroom · from 2 cited sources. How we work
What BTCS Disclosed
BTCS sold ether below its original cost basis to manage a $64.1 million loan on Aave, according to its quarterly filing with the U.S. Securities and Exchange Commission dated November 12. The filing shows 46,676 ETH securing the borrowings as of November 9, with collateral worth about $99.3 million at an ETH price of $2,127, or roughly 155% of the outstanding debt including accrued interest.
The company said in the filing that "Sales of ETH were executed at prices below their original cost basis," describing the transactions as part of its collateral management strategy. BTCS did not disclose how much ETH was sold for the Aave position specifically, or how much of its losses stemmed from those sales.
Losses and Liquidation Status
BTCS recorded about $30.6 million in realized losses on digital asset transactions during the first nine months of 2026, according to the filing. The losses came from two sources: selling ETH to manage borrowing positions, and accounting losses recognized when ETH was moved into liquidity pools. The company reported a net loss of about $49.5 million for the nine-month period, compared with a $52.2 million profit a year earlier.
BTCS confirmed it had not experienced any full or partial liquidation events involving its DeFi borrowings through November 11. The sales were therefore its own collateral management decisions, not forced liquidations by the lending protocol.
Liquidation Threshold and Market Price
Aave uses a health factor to determine whether a borrower's collateral supports its debt. A health factor below 1 makes a position eligible for liquidation, at which point other participants can repay debt and receive collateral. BTCS said Aave's liquidation threshold for ETH collateral is generally 80%. Applying that figure to its November 9 position yields an estimated health factor of 1.24 and a liquidation price near $1,717 per ETH.
The figures differ slightly across reports. CoinDesk put the level at around $1,700, while the Crypto.news write-up cited about $1,717, based on the same November 9 position. Both estimates assume the loan balance, collateral holdings and protocol parameters stay unchanged.
Ethereum traded near $1,932 on November 13, down about 5.6% over 24 hours according to Crypto.news price data. At that level, ETH would need to fall roughly another 11% to reach the estimated liquidation price.
Borrowing Pattern
Between January 1, 2025, and November 11, 2026, BTCS borrowed about $152.4 million in stablecoins through Aave and repaid roughly $89.4 million, the filing shows. Its borrowings primarily involved Tether's USDT and Aave's GHO stablecoin. The company's DeFi borrowing balance was about $63 million at September 30 and $64.1 million on November 9, including interest. Variable annual borrowing rates were about 6.54% for USDT and 4.5% for GHO as of November 9, and these rates move with Aave's lending conditions.
Why It Matters
For Traders
With ETH about 11% above the estimated liquidation level, BTCS's further collateral sales or debt repayments could add supply pressure on ETH if prices weaken.
For Investors
A treasury company selling ETH at a loss to defend DeFi debt highlights the leverage risk embedded in corporate Ethereum holding strategies.
For Builders
Treasury firms' health factors on Aave are a live signal of liquidation risk, so lending protocol risk teams should monitor concentrated large borrowers during drawdowns.
This article is for information only and is not financial advice. Read the full disclaimer.
