Founders Fund, co-founded by Peter Thiel, disposed of all its shares in ETHZilla, which stands out with its Ethereum-based digital asset treasury strategies. The sale was finalized with the 13G filing reported to the US Securities and Exchange Commission (SEC). As one of Silicon Valley’s most well-known investors, Thiel is known for the financing he provides to various technology and cryptocurrency projects. Founders Fund, on the other hand, became a major shareholder in the early stage, turning ETHZilla into a notable institutional player in the crypto market.
Unexpected Move: Full Exit and Its Reflections on the Markets
Just a while ago, Thiel and Founders Fund’s entry into ETHZilla led to a nearly ninety percent increase in the company’s share price in a short time. However, according to the new document, the fund severed all ties with the company by completely selling the 7.5 percent shares it acquired in August. After the sell-off, ETHZilla shares fell 7 percent in early trading, with the price falling to $3.20. This is 97 percent below the peak of $107 reached last summer. The timing of the sale is interpreted as decreasing institutional interest in the digital asset treasury (DAT) model.
ETHZilla’s New Strategic Direction
ETHZilla has tried various strategies for the use of crypto assets in treasury management since its inception. Finally, the company announced that it has begun focusing on the tokenization of real-world assets (RWA) rather than just accumulating ETH. In this context, it is aimed to move traditional financial products such as aircraft engines and mortgage loans to blockchain. Recently, $40 million worth of ETH belonging to the company was sold for share buyback, and $74.5 million of ETH was sold for debt management purposes. ETHZilla currently has approximately 69,800 ETH in its vault, and its total asset value is around $139 million at current prices.
Founders Fund’s exit on ETHZilla signals a significant shift in thinking around asset allocation and enterprise risk management in the industry. Although the institution continues to invest in some crypto companies in its portfolio, the sale stands out as a sign of a change in strategy for ETHZilla. Especially recent market fluctuations have increased the selectivity of investors in their risk perception and preferences.
ETHZilla’s financial results and size remain low compared to other industry players. Although the company holds large amounts of ETH, it has experienced a serious decrease in its reserves due to debt management and share buybacks. This situation raised questions about the long-term sustainability of the company.
The exit of institutional investors will be directly linked to how quickly ETHZilla can adapt to its new business model and its capacity to generate revenue from real asset tokenization. It is considered in the industry that the company’s moves in the RWA field will be carefully monitored to ensure stability at current price levels.
On the other hand, the complete withdrawal of the Founders Fund was perceived as a weakening of institutional support for the company’s treasury model on Ethereum. However, it is stated that the fund maintains its position in other crypto infrastructure companies and does not mean a complete exit from the market. Comments regarding the distribution of capital in a more selective and focused manner also come to the fore.
ETHZilla’s success in the coming period will depend on the market acceptance of innovative real asset projects and cash flow generation, rather than just its crypto asset accumulation strategy. The company’s performance in this area will indicate whether it can re-attract the attention of institutional investors.
