Peter Thiel's Founders Fund has fully divested from ETHZilla, causing a significant drop in the company's stock.
Peter Thiel's Founders Fund has fully exited its investment in the Ethereum treasury company ETHZilla, as revealed in a recent SEC filing. Following this news, ETHZilla's stock saw a decline of over 3% in pre-market trading, dropping to $3.51, a staggering 97% plunge from its peak of $107.
Background on Investment
The Founders Fund initially acquired a 7.5% share in ETHZilla in August 2025, coinciding with the rebranding of 180 Life Sciences towards digital assets. Thiel's involvement at that time contributed to a significant 90% increase in Ethereum's price during a single trading day.
ETHZilla launched its treasury strategy last summer, successfully raising $565 million from investors including Electric Capital, Polychain Capital, and GSR. The project aimed to serve as a traditional finance tool for accumulating Ethereum and generating yield through staking.
Shift in Strategy
However, ETHZilla has pivoted from its original plan of asset accumulation to liquidation:
- In October, the company sold $40 million worth of Ethereum to support a $250 million stock buyback.
- In December, it offloaded an additional 24,291 ETH, valued at $74.5 million, to meet obligations on convertible bonds.
New Focus on Real-World Assets
In its December update, ETHZilla indicated that its valuation would increasingly depend on growth in the real-world asset tokenization sector. The company has since taken concrete steps in this area:
- Mortgage Investments: On February 5, it acquired 95 modular home loans for $4.7 million, aiming for tokenization on the Arbitrum L2 network with a projected annual yield of 10.36%.
- Aviation Assets: ETHZilla also purchased two CFM56-7B24 engines to tokenize on the Liquidity.io platform, which is regulated by the SEC.
Current Ethereum Holdings
Currently, ETHZilla is the sixth largest corporate holder of Ethereum, possessing 69,802 ETH worth approximately $140 million. This is significantly less than the top holder, Bitmine Immersion Technologies, which controls 4.37 million ETH valued at around $8.8 billion. Collectively, the top ten corporate holders possess over 6.1 million ETH, amounting to more than $12 billion. Notably, Binance's Changpeng Zhao has highlighted tokenization as a key growth area for the crypto sector.
