ETHZilla has acquired aircraft engines for $12.2M as part of a strategic shift amidst significant financial challenges.
ETHZilla, a company backed by Peter Thiel, has shifted its strategy by purchasing two CFM56-7B24 aircraft engines for $12.2 million through its newly formed subsidiary, ETHZilla Aerospace LLC. The engines have been leased to a major airline, with maintenance managed by Aero Engine Solutions.
The lease agreement includes an option for either party to buy or sell the engines for $3 million each at the end of the lease, assuming they remain in good condition. This acquisition is a response to a growing shortage of aircraft components, with the International Air Transport Association (IATA) predicting airlines will spend about $2.6 billion on leasing spare engines by 2025. Additionally, TechSci Research estimates that the leasing market for this sector could grow to $15.56 billion by 2031.
Strategic Shift
ETHZilla's move into tangible assets comes as the company grapples with severe financial issues, having seen its stock value decline by 97% since August. In an effort to stabilize, the company has been actively liquidating its cryptocurrency holdings: it sold $40 million of ETH in October to buy back shares and offloaded $74.5 million in December to reduce debt.
Now, ETHZilla is pivoting towards real-world assets (RWA) and plans to tokenize these assets in collaboration with the regulated broker Liquidity.io. The firm has also acquired a 15% stake in Zippy, a lending company, and invested in Karus, an auto loan platform, both of which are set to be digitized. ETHZilla anticipates launching its first tokenized products in the first quarter of this year.
Ethereum Activity
In a separate development, a long-dormant Ethereum whale recently moved 50,000 ETH, valued at approximately $145 million, to a deposit address at the Gemini exchange. This address had been inactive for nine years and previously withdrew 135,000 ETH from Bitfinex when the price was around $90. The current value of ETH has surged, with the whale still holding 85,283 ETH after the transfer. This transaction was noted by analysts from EmberCN, who highlighted similar movements in the Bitcoin network where an unknown entity moved 909 BTC after 13 years of inactivity.
The timing of the ETH transfer aligns with a recent market correction, as Ethereum is currently trading at around $2,915, reflecting a slight decrease of 0.6% in the past day.
