BTCS Sold Ethereum at a Loss to Maintain Aave Loans - ForkLog
U.S. public company BTCS sold Ethereum below its purchase price to maintain sufficient collateral for loans on the DeFi platform Aave, as of November 9 holding $64.1 million in debt with $99.3 million in ETH collateral.
The American firm primarily uses borrowed funds to allocate capital in DeFi protocol liquidity pools that generate income. However, when Ethereum's price drops, the dollar value of the collateral decreases, while the debt denominated in stablecoins remains relatively stable.
As a result, the borrower must either replenish the collateral or reduce the debt to avoid forced liquidation of the pledged coins. BTCS explicitly acknowledged in its report that it sold ETH below its initial cost to maintain the loan collateral ratio and meet obligations.
As of November 9, the collateral's value was approximately 1.55 times the debt amount. However, having collateral exceed the debt does not eliminate the risk of liquidation.
Realized Losses
For the first nine months of 2026, BTCS reported $30.6 million in net realized losses from digital asset transactions, compared to $8.6 million the previous year. The company attributed the result to two main factors: sales of Ethereum for DeFi loan management and accounting recognition of results when transferring cryptocurrency to liquidity pools.
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