BTCS recorded $30.6 million in realized digital-asset losses over nine months. The total includes both ETH sales below cost and losses recorded when ETH was deposited into liquidity pools.
Nasdaq-listed BTCS sold some of its ether below its purchase cost to maintain collateral levels and repay borrowing on Aave. In its third-quarter filing submitted on November 12, the company explained why it made the sales, but did not separately disclose how much ETH it sold.
Net realized losses on digital-asset transactions reached $30.6 million in the first nine months of 2026, compared with $8.6 million a year earlier. The total includes losses from both ETH sales and deposits into liquidity pools.
The loss was not all from ETH sales
When BTCS deposits ETH into a liquidity pool, it removes the ETH from its books and records its interest in the pool instead. If the ETH is worth less at the time of deposit than its carrying value, the company recognizes the difference as a realized loss. BTCS did not report the sales loss separately from the loss recorded on pool deposits.
BTCS’s Imperium business supplies assets to swap pools on Ethereum mainnet and Base and earns transaction fees. The company’s description of its operations says it deposits paired assets into pools, with fee income depending on trading activity and its share of the pool. Assets in liquidity pools grew from $7.6 million at the end of June to $40.9 million at the end of September. BTCS took on $27 million of additional DeFi borrowing during the third quarter to expand those positions.
46,676 ETH backed the Aave borrowing
As of November 9, BTCS reported about $64.1 million of Aave borrowing, including accrued interest. Approximately 46,676 ETH secured the debt, valued at $99.3 million using that day’s closing ETH price of $2,127. Those balances can change with subsequent transactions, interest and the ETH price.
| Measure | Date or period | Amount |
|---|---|---|
| Aave borrowing, including interest | November 9, 2026 | $64.1 million |
| Aave collateral | November 9, 2026 | 46,676 ETH; $99.3 million |
| Cash and cash equivalents | September 30, 2026 | $463,250 |
| Net realized loss on digital-asset transactions | January–September 2026 | $30.6 million |
Aave uses a “health factor” to determine whether a loan is eligible for liquidation. To calculate the ratio, it multiplies each collateral value by its liquidation threshold, adds the results and divides by total debt. When the result falls below 1, other participants can repay part or, depending on the conditions, all of the debt in exchange for collateral.
A borrower can improve the ratio by adding collateral or repaying debt. Dividing the reported collateral value by the debt alone does not establish BTCS’s exact liquidation price; current balances, accrued interest and protocol parameters also matter. BTCS said it had experienced no partial or full liquidation of its DeFi borrowing through November 11.
The loans have no fixed maturity and remain outstanding until repaid or liquidated under the protocol’s rules. On November 9, the company reported annual variable borrowing rates of about 6.54% for USDT and 4.5% for GHO. It primarily uses the borrowing to fund liquidity-pool positions and compares financing costs with the income those positions generate. Both interest rates and trading-fee income can change.
A quarterly profit within a nine-month loss
BTCS’s third-quarter results announcement reported net income of $54.5 million for July through September. The main contributor was $58.3 million of unrealized gains on digital assets. The company also recorded $3.6 million of realized gains on digital-asset transactions and a $5.7 million impairment loss during the quarter. Unrealized gains reflect an increase in the value of assets the company still holds, rather than cash received from selling them.
Across January through September, however, BTCS reported a net loss of $49.5 million. Third-quarter revenue was $4.1 million and gross profit was $3.5 million, with DeFi accounting for about 86% of total revenue.
Cash and cash equivalents stood at $463,250 at the end of September. For November 9, the company reported a combined $142.6 million in cash, stablecoins and liquid digital assets, mainly ETH. Assets pledged to Aave cannot be used freely for general corporate spending while the associated loans remain outstanding. Some digital assets are subject to protocol withdrawal periods. Network congestion and market volatility can also make it harder to convert them quickly into cash.
Management believes its assets and financing options can cover its obligations for at least twelve months from the filing date. It bases that assessment on current market conditions, regulation and operating plans, which remain subject to change.
