BTCS, a Nasdaq-listed Ethereum treasury company, has sold ETH below its purchase price in an effort to protect a $64.1 million loan on the decentralised lending platform Aave from potential liquidation.

As of November 9, 2026, the company had pledged 46,676 ETH, valued at $99.3 million, as collateral for the borrowing. A further decline in ETH prices could trigger automatic liquidation, with the threshold estimated at roughly $1,717 per ETH, assuming the loan and collateral remain unchanged. Based on those stated figures, the estimated threshold sits roughly 19% below the implied value of the pledged ETH — a cushion that narrows mechanically if ETH declines further.

Aave is one of the largest decentralised finance lending protocols on Ethereum, allowing users to borrow against overcollateralised crypto positions managed by smart contracts rather than lenders. The BTCS case underscores a central risk of crypto-backed lending: borrowers must maintain sufficient collateral even when markets fall, forcing them to inject additional assets, repay debt, or sell holdings at a loss. Ethereum treasury companies — a model adopted by a growing number of publicly listed firms — hold ETH on their balance sheets and typically raise liquidity by borrowing against those holdings rather than selling them outright. Because these firms file public disclosures with securities regulators, as BTCS does through its quarterly reports, their borrowing strategies are among the more traceable examples of how the treasury-company model behaves during market downturns.

BTCS has borrowed approximately $152.4 million in stablecoins through Aave since January 2025, of which it has repaid about $89.4 million. The company's latest quarterly filing also reported $30.6 million in realised losses on digital asset transactions for the first nine months of 2026, primarily linked to managing DeFi borrowing positions and liquidity pool investments.

Unlike conventional loans, Aave's automated liquidation mechanism can sell a borrower's collateral when its health factor — a measure of collateral relative to outstanding debt — falls below the required threshold, leaving little room to negotiate repayment terms. As a result, a treasury strategy designed to unlock liquidity without selling crypto holdings can ultimately compel borrowers to sell those same assets, potentially crystallising losses during market downturns. From here, the useful markers are observable rather than predictive: ETH's price relative to the roughly $1,717 estimated liquidation level, and whether BTCS adds collateral, repays more of its outstanding Aave debt, or discloses further position changes in upcoming filings.