Nasdaq-listed Ethereum treasury firm BTCS has been selling its ETH holdings below their original purchase prices to reduce the risk of liquidation on its $64 million loan from decentralized lending platform Aave.

In a quarterly filing released Thursday, the company disclosed that its Aave borrowing had reached approximately $64.1 million as of November 9, including accrued interest. The debt was backed by 46,676 ETH, valued at approximately $99.3 million based on an Ethereum price of $2,127. This puts its collateral value at roughly 155% of the outstanding loan.

BTCS stated that it had disposed of Ethereum at prices below its acquisition costs as part of its efforts to control collateral levels and maintain the health of its DeFi borrowing arrangements.

The company did not provide details about the volume of ETH sold or reveal how much of its realized losses came from these transactions.

Aave Loan Faces Liquidation Risk if Ethereum Falls Toward $1,700

Aave relies on automated smart contracts to monitor borrowers and enforce lending conditions instead of using traditional loan management systems. The protocol tracks each position through a health factor, which measures the value of eligible collateral relative to the outstanding debt.

When this indicator falls below 1, Aave can automatically sell a portion of the deposited collateral to recover the borrowed funds.

BTCS noted that Aave typically recognizes approximately 80% of its deposited ETH when calculating collateral coverage. Using the figures reported for November 9, CoinDesk estimates that the company’s loan had a health factor of around 1.24.

Based on those calculations, Ethereum could fall to approximately $1,717 before the borrowing position becomes eligible for liquidation, assuming the debt and collateral balances remain unchanged.

Ether was trading near $1,950 on Friday, leaving it approximately 12% above the estimated liquidation level. However, this is still considerably below the $2,127 price recorded in BTCS’s latest financial disclosure. Any changes to the company’s holdings or borrowing balance since November 9 could alter the liquidation threshold.

The company’s financial flexibility is also limited by its relatively small cash reserves. BTCS reported holding approximately $463,000 in cash at the end of September. It also disclosed that most of its cryptocurrency assets had been committed to Aave as collateral, restricting access to those holdings while the loan remains outstanding.

BTCS’s Aave Debt Expands From $320,000 to $64.1 Million

BTCS has rapidly increased its borrowing activity on Aave over the past year. When the company first disclosed its position in April 2025, its outstanding loan stood at just $320,000, backed by 446 ETH.

By August 2026, its borrowing had grown to approximately $53 million, with more than 46,500 ETH pledged as collateral.

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. During the same period, it repaid approximately $89.4 million.

The company’s board has set a maximum loan-to-value ratio of 50% for its Aave borrowing arrangements. This means BTCS is permitted to borrow up to half the market value of its pledged assets.

However, falling ETH prices can increase the LTV ratio even if the company does not take on additional debt. To restore its borrowing position, BTCS may need to provide more Ethereum as collateral, repay part of its outstanding balance, or sell some of its digital assets.

With a substantial portion of its treasury already tied up in the lending protocol, further declines in Ethereum could intensify pressure on BTCS to maintain sufficient collateral and avoid forced liquidations.