Ethereum Treasury Company Sells ETH at a Loss: Aave Altcoin Connection Emerges

The 46,676 ETH pledged as collateral was worth approximately $99.3 million, based on the Ethereum price of $2,127 used in the company's calculations.

As a result, the collateral value represented approximately 155% of the total outstanding debt.

However, a decline in Ethereum's price reduces the dollar-denominated value of the collateral. According to CoinDesk's calculations, the loan's health factor stood at approximately 1.24 based on the debt and collateral amounts recorded on November 9.

On Aave, a health factor falling below 1 can make a borrowing position eligible for automatic liquidation.

The report identified $1,717 as the estimated liquidation threshold when Ethereum was trading at approximately $1,950.

This price is not a definitive forecast of future market movements. The liquidation threshold could change if the company repays part of its debt, adds collateral, or carries out other transactions.

Ethereum Sales Were Executed at a Loss

In its SEC filing, BTCS confirmed that some Ethereum sales had been executed below the assets' original acquisition cost.

The company explained that the sales were intended to manage collateral levels and health factors associated with its DeFi borrowing positions.

However, BTCS did not disclose how much ETH was sold specifically for this purpose or how much of its total realized loss was attributable to those transactions.

At the end of September, BTCS held approximately $463,000 in cash and cash equivalents. The company also reported that a substantial majority of its digital assets were being used as collateral on Aave.

The scale of the borrowing is particularly noteworthy. In April 2025, the company had approximately $320,000 in outstanding debt backed by 446 ETH. By November 2026, its Aave obligations had exceeded $64 million.

BTCS reported that no liquidation had occurred as of November 11.

How Could Ethereum's Price Decline Affect the Company?

A decline in Ethereum's price could increase pressure on BTCS's outstanding debt by reducing the value of its collateral.

Under such circumstances, the company might need to provide additional ETH collateral, reduce its debt, or sell more assets.

However, the course of action would depend on the company's liquidity, its current position on Aave, and prevailing market conditions.

With a substantial portion of its collateral tied up in a DeFi protocol, effective cash management becomes particularly important.

Kriptofoni Analysis

BTCS's decision to sell Ethereum holdings at a loss highlights the risks cryptocurrency treasury companies may face when borrowing through DeFi platforms.

A decline in Ethereum's price does more than reduce the value of assets on a company's balance sheet. It can also increase the risk of automatic liquidation on collateralized borrowing positions.

Nevertheless, the $1,717 level represents a conditional calculation based on the company's position as of November 9. Without knowing its current debt and collateral amounts, the figure should not be treated as BTCS's definitive liquidation price.