BTCS used Ethereum to repay Aave debt and ended Q2 with just $317,000 in cash

Nasdaq-listed Ethereum infrastructure company BTCS swapped ETH into USDT to pay down Aave loans in the second quarter and ended June 30 with $317,113 in cash and stablecoins.

It also held about $88.1 million in other current digital-asset categories, making the issue less a lack of assets than how much of the balance sheet was exposed to crypto markets and DeFi.

Comparing BTCS's first-quarter filing with its second-quarter filing shows about $8.27 million of the second-quarter ETH-to-USDT swaps for principal and $381,103 for accrued interest. BTCS described the move in its results announcement as an $8.2 million Aave repayment.

At quarter-end, BTCS reported $89.3 million in assets and $50.4 million in total liabilities, including $36.0 million in DeFi-protocol loans. Cash was $262,436 and stablecoins were $54,677, together equal to about 0.36% of assets.

Other current assets included treasury holdings, DeFi deployments, staked assets, liquidity-pool positions, and NFTs. They had balance-sheet value, but unlike idle cash, they remained subject to market moves, protocol risks, and collateral demands.

BTCS sells Ethereum to shrink Aave debt

BTCS's reported Aave collateral declined from about 49,970 aEthWETH worth $105.1 million on March 31 to 47,775 worth $75.0 million on June 30. DeFi loans fell from $43.8 million to $36 million over the same period.

The June loan balance was about 48% of reported collateral value.

By Aug. 17, BTCS reported $43.0 million of DeFi borrowings, including accrued interest, backed by about 46,525 ETH worth $88.7 million at $1,905 per ETH.

Borrowings had risen from quarter-end while collateral units had fallen, although collateral value had recovered. BTCS said it had not experienced a full or partial liquidation through that date.

Ethereum was near $2,336 when checked on Aug. 20, above the valuation used three days earlier. That rebound says nothing about changes to BTCS's debt or collateral after Aug. 17, and the company did not provide a position-specific liquidation price.

The $34.9 million net loss for the second quarter also did not reflect cash burn. It included $21.4 million of unrealized digital-asset losses and $4.9 million of realized transaction losses. Net cash used in operating activities was $1.3 million for the entire first half, while many DeFi settlements were classified as non-cash.

Second-quarter gross profit nevertheless reached $1.5 million at a 61% margin, with DeFi revenue also at $1.5 million. Stronger margins improved the operating picture, but the earlier ETH swaps show that collateral management can still consume crypto assets when market values fall.

Without a newer debt, collateral, and health-factor snapshot, the Aug. 20 ETH rebound cannot determine whether another sale would be needed in the next decline.