BTCS, a Nasdaq-listed company with Ethereum as its primary treasury asset, has been offloading ETH at a loss to prevent its $64 million loan on the decentralized lending platform Aave from reaching liquidation levels.
In its quarterly filing published Thursday, the company reported approximately $64.1 million in outstanding Aave debt as of November 9, including accumulated interest. The loan was secured by 46,676 ETH, worth approximately $99.3 million at the reported Ethereum price of $2,127. This placed the collateral value at around 155% of the total amount borrowed.
BTCS confirmed that it had sold Ethereum below its initial purchase prices to manage collateral requirements and maintain healthy borrowing conditions across its decentralized finance (DeFi) positions.
However, the filing did not specify how many ETH were sold for this purpose or disclose the portion of the company’s realized losses attributable to these transactions.
ETH Price Near $1,700 Could Trigger BTCS Loan Liquidation
Aave uses automated smart contracts to monitor lending positions rather than relying on traditional loan officers. Its system evaluates each borrower’s financial position through a metric called the health factor, which measures eligible collateral against outstanding debt.
If this metric falls below 1, the protocol can automatically liquidate some of the borrower’s deposited assets to recover the amount owed.
BTCS disclosed that approximately 80% of its deposited Ethereum is generally recognized by Aave for collateral calculations. Based on the November 9 figures, the company’s borrowing position had a health factor of approximately 1.24.
According to CoinDesk’s calculations, Ethereum would need to decline to roughly $1,717 before BTCS reaches its estimated liquidation threshold, assuming its debt and collateral remain unchanged.
ETH was trading near $1,950 on Friday, keeping it approximately 12% above that critical level. However, the price remains well below the $2,127 valuation recorded in the company’s latest filing. Changes in its holdings or outstanding debt since November 9 could also affect the actual liquidation price.
BTCS has limited cash reserves to manage a potential liquidity squeeze. The company reported approximately $463,000 in cash at the end of September. It also revealed that a significant portion of its digital assets had been deposited on Aave as loan collateral, limiting its ability to use those holdings while the debt remains outstanding.
BTCS Aave Borrowing Surges to $64 Million
The company’s exposure to Aave has expanded considerably since it first disclosed its borrowing activity in April 2025. At that time, BTCS had borrowed approximately $320,000 against 446 ETH.
By August 2026, its outstanding debt had increased to $53 million, backed by more than 46,500 ETH.
Since the beginning of 2025, BTCS has borrowed approximately $152.4 million in stablecoins, primarily Tether’s USDT and Aave’s dollar-pegged GHO token. It has repaid approximately $89.4 million over the same period.
BTCS’s board has authorized additional borrowing through Aave, provided the company’s loan-to-value ratio does not exceed 50%. This restriction limits its borrowing capacity to half the market value of its pledged collateral.
However, a sustained Ethereum price decline can push the borrowing ratio higher even without taking on additional debt. To bring the position back within approved limits, BTCS may need to deposit more ETH, repay part of its outstanding loan, or sell digital assets.
With most of its treasury already committed to Aave, continued weakness in Ethereum’s price could make managing the company’s $64.1 million borrowing position increasingly challenging.
