Shares of ETHZilla Corp came under heavy pressure in pre-market trading after billionaire investor Peter Thiel and his venture firm Founders Fund fully liquidated their position in the company.
The stock dropped to $3.33 in pre-market trading, down 5.13% from its previous close. This latest decline adds to an already steep fall, with shares now down roughly 97% from their 2025 highs.
SEC Filing Confirms Complete Exit
A late Tuesday SEC filing revealed that entities tied to Thiel now hold zero shares in ETHZilla. The disclosure marks a sharp reversal from August 2025, when Founders Fund had reported a 7.5% stake in the company.
At the time, Thiel’s investment was widely viewed as a strong endorsement of ETHZilla’s strategic pivot. The company had rebranded from its former identity as 180 Life Sciences, shifting from biotechnology into a high-leverage corporate Ethereum treasury model.
That pivot initially attracted more than $425 million in institutional backing. However, the subsequent volatility in Ethereum markets and the company’s leverage-heavy balance sheet have tested investor confidence.
Pressure on the Ethereum Treasury Model
ETHZilla positioned itself as an Ethereum-focused version of the corporate Bitcoin treasury strategy popularized by major Bitcoin-holding firms. But while Bitcoin treasury strategies have maintained relative investor support, Ethereum-focused leverage plays have faced stronger headwinds.
The company’s reliance on debt financing to accumulate Ether exposed it to amplified downside risk during periods of market weakness. As Ethereum prices fluctuated and debt obligations mounted, the sustainability of the model came into question.
Founders Fund’s full exit appears to reinforce growing skepticism about high-leverage Ether accumulation strategies.
Attempts to Stabilize the Business
In response to mounting pressure, ETHZilla has attempted to diversify and stabilize its operations. Recent strategic moves include:
- Asset Tokenization: Launching ETHZilla Aerospace to tokenize leased jet engines.
- Debt Reduction: Selling over 24,000 ETH in late 2025 to meet convertible bond obligations.
- Real Estate Exposure: Acquiring modular home loan portfolios aimed at generating on-chain yields.
These initiatives reflect a shift toward Real World Asset tokenization in an effort to reduce reliance on pure crypto price appreciation.
However, the market reaction suggests that investors remain focused on the departure of its most prominent institutional backer.
Investor Confidence Shaken
For many shareholders, Thiel’s involvement had served as a vote of confidence in the company’s long-term vision. His exit raises broader questions about the durability of Ethereum treasury models, especially those built on leverage.
While ETHZilla is attempting to reposition itself, the loss of a major investor adds uncertainty at a time when market conditions remain volatile.
The coming quarters will likely determine whether the company’s pivot toward tokenization and diversified assets can restore stability or whether the broader Ethereum treasury strategy continues to face structural challenges.
