Is President Trump selling Bitcoin? WLFI pays off Aave debt with WBTC to avoid liquidation but risk remains

A wallet attributed to Donald Trump's World Liberty Financial (WLFI) voluntarily deleveraged by withdrawing 173 Wrapped Bitcoin (WBTC) from Aave V3 and using it to repay $11.75 million in stablecoin debt on February 5th. This action, which converted Bitcoin exposure into cash, was taken to raise the wallet's health factor above the liquidation threshold of 1.0, as falling Bitcoin prices threatened forced liquidation at unfavorable auction terms.

The wallet still maintains significant exposure, holding 167 WBTC and 13,298 WETH collateral against $18.47 million in USDC debt, with a current health factor of 1.54. This move reflects a broader system-wide trend where large holders ("whales") are selling collateral to reduce leverage rather than waiting for protocols to trigger forced liquidations, which amplify market drawdowns.

The article notes that while voluntary deleveraging prevents immediate cascade liquidations, it contributes to persistent selling pressure, especially as institutional demand via Spot Bitcoin ETFs has reversed into outflows. This liquidity vacuum means that deleveraging sales meet weaker demand, slowing potential market recoveries.

(Source：CryptoSlate)