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

BTCS Q2 DeFi balance sheet infographic comparing March 31 and June 30 Aave collateral and loans, with June 30 assets, liabilities, cash and stablecoins

Nasdaq-listed Ethereum infrastructure firm 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 additionally held about $88.1 million in different present digital-asset classes, making the difficulty much less an absence of belongings than how a lot of the steadiness sheet was uncovered to crypto markets and DeFi.

Comparing BTCS’s first-quarter filing with its second-quarter filing reveals about $8.27 million of the second-quarter ETH-to-USDT swaps for principal and $381,103 for accrued curiosity. BTCS described the transfer in its results announcement as an $8.2 million Aave compensation.

At quarter-end, BTCS reported $89.3 million in belongings and $50.4 million in whole liabilities, together with $36.0 million in DeFi-protocol loans. Cash was $262,436 and stablecoins have been $54,677, collectively equal to about 0.36% of belongings.

Other present belongings included treasury holdings, DeFi deployments, staked belongings, liquidity-pool positions, and NFTs. They had balance-sheet worth, however not like idle cash, they remained topic to market strikes, protocol dangers, and collateral calls for.

BTCS Q2 DeFi balance sheet infographic comparing March 31 and June 30 Aave collateral and loans, with June 30 assets, liabilities, cash and stablecoins
A steadiness sheet comparability reveals BTCS slicing DeFi loans and Aave collateral in Q2 whereas ending June with $317,113 in cash and stablecoins.

BTCS sells Ethereum to shrink Aave debt

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

The June mortgage steadiness was about 48% of reported collateral worth.

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By Aug. 17, BTCS reported $43.0 million of DeFi borrowings, together with accrued curiosity, backed by about 46,525 ETH price $88.7 million at $1,905 per ETH.

Borrowings had risen from quarter-end whereas collateral items had fallen, though collateral worth had recovered. BTCS stated it had not skilled a full or partial liquidation by means of that date.

Ethereum was near $2,336 when checked on Aug. 20, above the valuation used three days earlier. That rebound says nothing about modifications to BTCS’s debt or collateral after Aug. 17, and the corporate didn’t present a position-specific liquidation value.

The $34.9 million web loss for the second quarter additionally didn’t mirror cash burn. It included $21.4 million of unrealized digital-asset losses and $4.9 million of realized transaction losses. Net cash used in working actions was $1.3 million for the whole first half, whereas many DeFi settlements have been labeled as non-cash.

Second-quarter gross revenue nonetheless reached $1.5 million at a 61% margin, with DeFi income additionally at $1.5 million. Stronger margins improved the working image, however the earlier ETH swaps present that collateral administration can nonetheless devour crypto belongings when market values fall.

Without a more moderen debt, collateral, and health-factor snapshot, the Aug. 20 ETH rebound can’t decide whether or not one other sale could be wanted in the subsequent decline.

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