BTCS Sold ETH at a Loss to Defend $64M Aave Loan, Filing Shows

BTCS, a Nasdaq-listed Ethereum treasury company, sold ETH below its original purchase price to manage a $64.1 million loan on Aave, according to its November 12 quarterly filing with the U.S. Securities and Exchange Commission. The filing puts hard numbers on the cost of that strategy: roughly $30.6 million in realized losses on digital asset transactions during the first nine months of 2026.

The company disclosed that 46,676 ETH secured its borrowings as of November 9. That collateral was worth about $99.3 million at an ETH price of $2,127, covering approximately 155% of the outstanding debt including accrued interest.

"Sales of ETH were executed at prices below their original cost basis," BTCS wrote in the filing, describing the transactions as part of its collateral management strategy. The company said it monitors borrowing positions and adjusts collateral or repays debt when market conditions require additional protection against liquidation.

The filing did not break out how much ETH was sold specifically for the Aave loan, or how much of the reported losses came from those sales. The $30.6 million figure covers two activities: ETH sold to manage borrowings, and accounting losses recognized when transferring ETH into liquidity pools. The company posted a net loss of about $49.5 million for the nine-month period, against a $52.2 million profit a year earlier.

Notably, BTCS confirmed it "has not experienced any full or partial liquidation events" on its DeFi borrowings through November 11. The sales were its own moves, not forced liquidations by the protocol.

What does the falling ETH price mean for the loan?

Aave uses a health factor to gauge whether collateral supports outstanding debt. Below 1, a position becomes eligible for liquidation, and other market participants can repay the debt in exchange for collateral.

BTCS said Aave's liquidation threshold for ETH collateral is generally 80%. Applied to the November 9 figures, that yields an estimated health factor of 1.24 and a liquidation price near $1,717 per ETH. The estimate assumes the loan balance, collateral and protocol parameters stay unchanged.

ETH traded near $1,932 on November 13, down about 5.6% over 24 hours, according to crypto.news price data. That leaves roughly an 11% drop before the estimated liquidation level.

How deep does the Aave reliance run?

Between January 1, 2025, and November 11, 2026, BTCS borrowed approximately $152.4 million in stablecoins through Aave and repaid around $89.4 million. The borrowings primarily involved Tether's USDT and Aave's GHO stablecoin — both designed to hold dollar values while the ETH pledged as collateral fluctuates.

The company disclosed variable annual rates of approximately 6.54% for USDT and 4.5% for GHO as of November 9, rates that move with Aave's utilization levels.

The DeFi borrowing sits inside a longer accumulation push. BTCS arranged convertible financing in May 2025 to fund additional purchases and validator operations, and had accumulated 55,788 ETH by July 2025 through equity financing, convertible debt and Aave borrowing.

How much flexibility does the company have left?

The balance sheet is tight in places. BTCS held approximately $463,000 in cash and cash equivalents at September 30, down from $1.53 million at the start of 2026. A substantial majority of its digital assets measured at fair value are deposited on Aave as collateral, subject to protocol restrictions while borrowings remain outstanding — limiting their availability for general corporate purposes.

The broader picture is more liquid. As of November 9, the company reported approximately $142.6 million in cash, stablecoins and liquid digital assets, against total debt obligations of about $82 million — the $64.1 million Aave position plus $17.9 million in convertible notes.

At September 30, BTCS reported total exposure to 59,856 ETH, comprising 49,571 ETH held at fair value and 10,285 ETH underlying liquidity pool positions.

Management said the Aave loans carry no fixed maturity and remain outstanding until repaid or liquidated under protocol rules, and that it expects available resources to support operations for at least 12 months, subject to market conditions. Whether that cushion holds depends largely on where ETH trades relative to the $1,717 level in the months ahead.