Billionaire investor Peter Thiel and his venture firm Founders Fund have completely divested from Ethereum treasury firm ETHZilla Corp., according to a Schedule 13G/A filing with the U.S. Securities and Exchange Commission.
The move marks a dramatic reversal from last year, when Thiel’s entry into the company propelled its valuation and sparked broad optimism about Ethereum‑centric corporate treasury strategies.
Key Takeaways
- Founders Fund has completely liquidated its 7.5% stake in ETHZilla, signaling a clean exit from the Ethereum treasury play.
- ETHZilla’s shares dropped sharply, reflecting the market’s reaction to Thiel’s departure and the firm’s earlier ETH sell-offs.
- The company is pivoting toward tokenizing real-world assets like leased aircraft engines to diversify revenue beyond ETH accumulation.
- Thiel’s exit indicates selectivity in institutional crypto investment, rather than a broader retreat from Ethereum or blockchain infrastructure.
From Institutional Endorsement to Total Exit
In August 2025, Founders Fund disclosed a 7.5% stake in what was then 180 Life Sciences Corp., a biotech firm that had pivoted into crypto and rebranded as ETHZilla with a plan to accumulate and actively manage Ethereum (ETH) on its balance sheet. Thiel’s backing provided a strong signal of confidence and helped send ETHZilla’s stock sharply higher.
Fast forward to 17 February 2026, the amended filing shows Founders Fund now owns zero shares and reports no voting or dispositive power in the company. That clean exit underscores how dramatically sentiment toward this particular play has shifted in less than a year.
Market participants reacted quickly. ETHZilla’s shares slid in both pre‑market and extended trading, extending a longer downturn that has seen the stock collapse from its peak.
A Brutal Market Story
ETHZilla’s journey since its pivot has been turbulent. At its height, the firm held more than 100,000 ETH following a large fundraising round in mid‑2025 that raised hundreds of millions of dollars to support its treasury strategy.
However, volatile market conditions and sustained weakness in ETH prices forced the company to liquidate a substantial portion of its holdings to manage debt and buy back shares.
According to recent market data:
- ETHZilla sold roughly $40 million worth of ETH for stock repurchases in late 2025.
- It then sold 24,291 ETH (about $74.5 million) in December to reduce debt obligations.
- Today, it holds roughly 69,800 ETH, significantly down from its peak.
Those sales and macro pressure on crypto prices have weighed heavily on the company’s valuation. After peaking above $100 per share last year, ETHZilla’s stock now trades just above $3, a staggering decline of nearly 97%.
What Thiel’s Exit Signals
Thiel’s complete pull‑out is significant not just because of the size of his original position, but because it highlights how quickly investor sentiment toward certain crypto business models can shift.
Institutional support for Ethereum treasury vehicles—built on the idea that firms can hold ETH as a reserve asset and generate returns via staking and DeFi strategies—was once considered a major narrative in crypto finance. ETHZilla’s early backers saw parallels with corporate Bitcoin treasury strategies popularized by companies like MicroStrategy.
But the recent exit is less about outright skepticism toward Ethereum itself and more about a reassessment of risk, execution, and return profiles in a tougher market environment. Founders Fund has reportedly maintained exposure to other blockchain infrastructure names even as it trims specific holdings like ETHZilla.
Market observers also interpret the timing as a broader signal that crypto treasury business models are under pressure, especially those disproportionately exposed to single asset price movements without clear, diversified revenue streams.
Pivot to Real‑World Assets
ETHZilla is attempting to redefine its business model away from pure ETH accumulation. The company has launched a subsidiary called ETHZilla Aerospace, focused on tokenizing real‑world assets (RWAs) such as leased aircraft engines and consumer financing portfolios (like manufactured home loans).
This pivot reflects a strategic shift that many crypto‑native businesses are now pursuing: finding recurring revenue and utility through tokenized exposure to physical economy cash flows rather than relying solely on appreciation of reserve assets. Whether this approach will stabilize ETHZilla’s future remains to be seen.
Consequences for ETH Treasury Plays
Thiel’s exit comes amid wider scrutiny of the broader ETH treasury space. Other companies with similar strategies have also adjusted their holdings or pursuit of yield as market conditions cooled. Some firms are holding through volatility, while others are changing tack or unwinding positions entirely.
The sudden drop in ETHZilla’s shares and the disappearance of a marquee backer like Thiel could influence sentiment among other institutional investors. Some analysts believe it may slow capital inflows into highly concentrated crypto balance sheet strategies, at least until clearer evidence of profitability and risk management emerges.
Final Take
Peter Thiel’s full exit from ETHZilla is more than a headline move—it is a notable moment in the evolution of institutional crypto investment. It highlights how quickly high‑profile bets can turn in dynamic markets, especially when tied to speculative treasury strategies.
For ETHZilla, the next chapter will hinge on whether its pivot into tokenized real‑world assets can deliver tangible results and restore investor confidence after a dramatic drawdown.
