Peter Thiel’s Founders Fund Exits Ethereum Firm ETHZilla Amid Crypto Slump

TLDR

• Thiel’s Founders Fund fully divests from ETHZilla amidst Ethereum losses.
• ETHZilla’s stock plummets 97% after Thiel’s exit and Ethereum decline.
• ETHZilla sells $114M in Ethereum to cover debts and stock buybacks.
• ETHZilla pivots to tokenizing real-world assets after Ethereum exposure drops.
• Ethereum treasury firm ETHZilla shifts focus amid market volatility.

Peter Thiel’s Founders Fund has fully divested from ETHZilla, a digital asset treasury firm holding Ethereum (ETH). The SEC filing confirms that Thiel’s entities reported zero ownership in ETHZilla by the end of 2025. ETHZilla shares fell sharply following the news, reflecting the firm’s declining market position.

Thiel initially acquired a 7.5% stake in ETHZilla through his Founders Fund in August 2025. The investment coincided with ETHZilla’s rebrand from 180 Life Sciences to a dedicated Ethereum treasury strategy. At that time, the firm had raised $565 million and positioned itself as a leading Ethereum accumulation vehicle.

ETHZilla’s stock peaked at $107 after the pivot, but the price has since collapsed to roughly $3.20. This represents an almost 97% decline from the firm’s peak valuation. The divestment by Thiel’s fund marks a significant reversal from earlier support.

ETHZilla Reduces Ethereum Holdings Amid Market Weakness

ETHZilla has sold large portions of its Ethereum holdings to manage financial obligations. In October 2025, the firm offloaded $40 million in ETH to fund a $250 million stock repurchase plan. A second sale in December added 24,291 ETH, worth $74.5 million, to repay senior secured convertible notes.

The firm now holds 69,802 ETH, down from its previous peak above 100,000 ETH. The reduction in holdings comes amid broader crypto market losses. Ethereum fell 28.4% in Q4 2025 and continued declining through early 2026.

ETHZilla’s value in Ethereum terms now stands near $140 million. This places it among the top 10 public corporate Ethereum holders. Its position remains far behind leaders such as BitMine Immersion Technologies.

ETHZilla Pursues New Tokenization Strategy

ETHZilla has shifted focus toward real-world asset tokenization after reducing Ethereum exposure. The firm acquired 95 manufactured home loans for $4.7 million to tokenize on an Ethereum Layer 2 platform. It also purchased two CFM56-7B24 aircraft engines for tokenization through an SEC-regulated platform.

The new strategy aims to generate yield through tokenized revenue streams. ETHZilla Aerospace, a subsidiary, will provide tokenized exposure to leased jet engines. The company intends to drive future value from cash flow and revenue growth in tokenized assets.

ETHZilla’s pivot reflects pressures on Ethereum treasury firms amid market volatility. The firm’s stock has fallen 28% year-to-date following broader crypto market declines. Thiel’s complete exit highlights changing sentiment toward Ethereum-focused corporate strategies.

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