BTCS Sold Ether Below Cost to Protect a $64.1 Million Aave Loan
BTCS has been selling ether for less than it paid, to keep a loan on Aave clear of the protocol's automatic liquidation. The Nasdaq-listed company, which holds ether as its main asset, told the SEC in a quarterly filing on Thursday that it owed about $64.1 million on the lending protocol as of 9 November, accrued interest included. That debt was backed by 46,676 ETH, worth $99.3 million at the $2,127 price the company used, or about 155% of what it owed. BTCS did not say how much ether it sold for that purpose. It also did not break out how much of its realized losses came from those sales.
"Sales of ETH were executed at prices below their original cost basis as part of the Company's active management of collateral levels and health factors associated with DeFi borrowing arrangements," the filing said.
How the protocol decides
Aave has no credit officer to call. The protocol scores every loan with a health factor, which weighs collateral, discounted by how much of it the protocol will count, against the debt outstanding. Below 1, anyone can repay part of the loan and take collateral in exchange. BTCS says Aave generally counts 80% of its ether, which puts the health factor on the 9 November figures at roughly 1.24 and the liquidation price near $1,717 an ether. CoinDesk and crypto.news arrive at that level separately from the filing's own numbers, and both attach the same caveat: the calculation holds only while the debt, the collateral and the protocol's parameters stay where they were.
The gap on Friday, measured twice
Ether ended the week well below the price in the filing's snapshot. CoinDesk put it around $1,950 on Friday and called that about 12% above the liquidation line. The outlet crypto.news put it near $1,932, down some 5.6% on the day, and figured another 11% of decline would reach the same level. Both are intraday readings hours apart. They do not reconcile. The distance they describe is much the same. BTCS said it had seen no full or partial liquidation of its DeFi borrowings through 11 November. Its position may have moved since the ninth.
Eighteen months of borrowing
The position began small. When BTCS first disclosed an Aave loan in April 2025 it had $320,000 borrowed against 446 ETH. By August 2026 the debt was $53 million against more than 46,500 ETH, and the September balance sheet put DeFi borrowings at about $63 million. Between the start of 2025 and 11 November the company borrowed some $152.4 million in stablecoins, mainly Tether's USDT and Aave's GHO, and repaid about $89.4 million. Its board caps new borrowing at a 50% loan-to-value ratio, a limit a falling ether price pushes through after the fact. Rates on 9 November were about 6.54% on the USDT debt and 4.5% on GHO. The loans carry no maturity date at all.
What the cash position allows
Cash is the thin part. BTCS held about $463,000 at 30 September, down from $1.53 million at the start of the year, and said a significant majority of its digital assets were posted on Aave as collateral and locked while the debt runs. On 9 November it counted $142.6 million in cash, stablecoins and liquid digital assets against roughly $82 million of total debt, the Aave loan plus $17.9 million of convertible notes. Realized losses on digital assets ran to about $30.6 million over the first nine months of 2026, from ether sales and from transfers into liquidity pools, and the nine-month net loss came to $49.5 million against a $52.2 million profit a year earlier. Aave's governance has spent this year reworking who absorbs a bad market first, and the listed companies holding ether have been posting losses of their own, with Bitmine reporting a $6.3 billion annual loss on its ether holdings. Neither the filing nor either account says what BTCS would sell next if ether keeps falling.
Read also: Nakamoto Moves 60 Million USDT of Its Kraken Loan to December 2027