ETHZilla ether sale highlights pressure on public crypto treasuries

Facing mounting market pressure, ETHZilla ether transactions are increasingly being used to manage debt and balance sheet risks instead of pure accumulation.

ETHZ sells 24,291 ETH to redeem convertible notes

ETHZilla disclosed in a regulatory filing that it sold 24,291 ether (ETH) for roughly $74.5 million to redeem senior secured convertible notes, marking the company’s second sale of ETH reserves. The latest disposal reflects a strategic shift as funding conditions tighten across digital asset markets.

The company said the 24,291 ETH was sold at an average price of $3,068, reducing its total holdings to roughly 69,800 ETH. At current valuations, that stash is worth more than $200 million. However, the move also signals an ether holdings reduction that contrasts with earlier accumulation-driven strategies.

Share price collapse and funding constraints

ETHZ shares were down about 4% on Monday and have now lost roughly 96% from their August highs. That dramatic drawdown has significantly weakened the company’s equity-based financing options. Moreover, the falling stock price has deepened the gap between the firm’s market value and its underlying crypto assets.

The latest transaction underscores the pressure facing digital asset treasury firms that raised capital to buy crypto earlier this year. Many publicly listed players are now trading below the net asset value (NAV) of their holdings, as equity prices have slumped far more than the value of the underlying tokens. That said, this public crypto treasury discount is forcing a rethink of capital allocation.

From accumulation to liability management

The widening NAV discount has made it harder, if not impossible, for some issuers to raise fresh capital to accumulate additional digital assets. Instead, several are shifting from balance sheet expansion toward crypto reserve management, using existing holdings to address debt obligations and other liabilities. The latest ETHZilla ether sale fits squarely into this emerging pattern.

Earlier in the fourth quarter, ETHZilla sold $40 million in ETH and used the proceeds to fund share repurchases. At that time, the stock was trading around $20 when the October buyback was announced. However, the shares have continued to slide since then, now trading below $7 despite the company’s efforts to support the price.

Outlook for further ETH sales

The company said it may continue to raise capital through further ETH sales or equity offerings as it works to advance its business plans. Moreover, ETHZ signaled that additional balance sheet moves could be considered if market conditions remain volatile. These steps would aim to manage leverage while preserving as much core ETH exposure as feasible.

In summary, ETHZilla’s latest disposal of 24,291 ETH for $74.5 million illustrates how crypto treasuries are increasingly using on-chain assets to redeem debt and navigate hostile equity markets, even as their remaining 69,800 ETH still represents a substantial long-term bet on the asset.