ETHZilla Files for $350M Funding as Digital Asset Treasuries Grow

TLDR

• ETHZilla raised $350 million through convertible debentures to expand its Ethereum-focused treasury strategy.
• The company’s total debenture program value now reaches nearly $500 million after this new funding.
• ETHZilla holds 102,264 ETH worth approximately $462 million, alongside $559 million in cash and US Treasuries.
• The company plans to invest in Ethereum scaling protocols and real-world asset tokenization to boost cash flow.
• 4.34% of Ethereum’s total supply is now controlled by corporate digital asset treasuries like ETHZilla.

ETHZilla Corporation, a Nasdaq-listed decentralized finance technology firm, has raised $350 million through convertible debentures. This new round of funding will help the company further expand its Ethereum-focused treasury strategy and invest in tokenization projects. The company also plans to increase its cash flow by focusing on Ethereum scaling protocols and the tokenization of real-world assets.

ETHZilla’s New Convertible Debentures and Treasury Strategy

ETHZilla announced a new agreement with an existing institutional investor to raise $350 million through convertible debentures. This follows a $156.5 million tranche issued earlier, bringing the total value of the company’s debenture program to nearly $500 million. The new debentures will carry a 2% annual interest rate, with the conversion price set at $3.05 per share.

Under the revised terms, the earlier notes remain interest-free until February 2026. After this, they will convert to a 2% interest rate, down from the previous 4%.

ETHZilla holds substantial reserves, including 102,264 ETH worth about $462 million. The company also has $559 million in cash and US Treasuries, along with 1.5 million earned protocol tokens. ETHZilla’s hybrid strategy focuses on both investing in short-term securities and Ethereum scaling protocols.

Ethereum Digital Asset Treasuries and Supply Control

The growing trend of digital asset treasuries (DATs) is influencing Ethereum’s supply. Currently, 4.34% of the total ETH supply is controlled by corporate entities, including ETHZilla. These companies are acting as quasi-fund managers for digital assets, which helps tighten the supply and support ETH’s price.

ETHZilla is positioning itself to benefit from this trend by expanding its Ethereum reserves and diversifying into tokenization projects. Its strategy mirrors that of Bitcoin-focused companies, which have influenced cryptocurrency price surges in previous market cycles. As ETHZilla continues to increase its holdings, it plans to balance ETH accumulation with cash-flow generation.

ETHZilla’s management has introduced new reporting metrics, such as ETH Net Asset Value (NAV) and Market Net Asset Value (mNAV). These measures aim to capture the value of the company’s crypto-centric balance sheet. However, ETHZilla warns that these figures should not be confused with traditional net asset value calculations.

Company Focuses on Ethereum Layer-2 Growth

ETHZilla’s latest funding round highlights its commitment to Ethereum’s ecosystem and its hybrid strategy for long-term growth. The company plans to deepen its involvement in Ethereum’s Layer-2 landscape, which will help drive additional cash flow. Management will provide further guidance in its third-quarter earnings report, offering insight into how it intends to balance ETH accumulation with revenue generation.

With nearly half a billion dollars in convertible debentures now outstanding, ETHZilla is in a strong position to continue expanding its presence in Ethereum-focused initiatives. The company’s growth and strategy reflect the increasing influence of digital asset treasuries in the broader cryptocurrency market.

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