Peter Thiel-Backed ETHZilla Dumps $74.5M in ETH, Abandons Treasury Strategy – What Went Wrong?
A high-profile crypto fund just executed a stunning strategic reversal.
ETHZilla, the venture once championed by billionaire Peter Thiel, has liquidated its entire Ethereum treasury position. The move sends a $74.5 million shockwave through the market and marks a complete abandonment of its long-heralded 'ETH-as-strategic-reserve' thesis. This wasn't a routine rebalance—it was a full-scale retreat.
The Great Unwind
The fund systematically offloaded its holdings, bypassing the gradual, dollar-cost-averaging approach favored by more conservative institutions. Sources close to the matter describe the decision as 'defensive' and 'liquidity-focused,' a stark contrast to the growth-oriented rhetoric that initially attracted high-profile backers. The timing raises eyebrows, coming amid what many analysts see as a maturing infrastructure phase for the Ethereum network.
Strategy, or Its Absence?
Abandoning a core treasury strategy mid-cycle suggests a fundamental reassessment—or a loss of conviction. While the official line cites portfolio management and risk mitigation, the scale of the sell-off speaks louder. It cuts against the grain of the 'digital gold 2.0' narrative that many crypto-native funds have been building for years. One cynical observer noted it was a classic case of 'financial innovation' meaning 'we changed our minds after the hype cycle peaked.'
Ripple Effects and Reality Check
The move forces a market reality check. If a Thiel-backed entity with presumably strong conviction can make such a sharp pivot, what does it signal about institutional stamina? It underscores that in crypto, even blue-chip strategies are subject to rapid revision. The capital has moved on, searching for the next narrative—leaving others to ponder whether this was prudent risk management or a failure of strategic nerve.
ETHZilla Retires Its mNAV Tracker, Refocuses on Operations Amid Stock Rout
Alongside the sale, ETHZilla announced it would discontinue its modified net asset value, or mNAV, dashboard, which had been used to track the relationship between its market capitalization and the value of its ETH holdings.
Management said future disclosures would focus on balance sheet updates, revenue growth, and cash FLOW from its real-world asset tokenization business, marking a shift in messaging and priorities.
The move comes as ETHZilla’s stock continues to slide. Shares were down about 4% on Monday and have fallen roughly 96% from their August highs, leaving the company trading well below the value of its remaining crypto assets.
The company started its accumulation in late July, but earlier in the fourth quarter, ETHZilla sold another $40 million worth of ETH to fund share repurchases.
However, the stock has continued to weaken, now trading below $7 compared with around $20 when the buyback was announced.
ETHZilla Caught on the Wrong Side of Ethereum’s Cycle
ETHZilla’s retreat reflects broader pressure across the digital asset treasury sector. Many public companies that rushed to add crypto to their balance sheets during the summer rally are now trading at steep discounts to the net asset value of their holdings.
That disconnect has limited their ability to raise fresh capital and, in some cases, forced them to sell crypto to manage debt and liquidity rather than accumulate more.
For ETHZilla, the problem was less about Ethereum itself and more about timing and concentration. The company built most of its ETH position near market cycle highs.
Its largest purchase came on Aug. 12, when it acquired more than 82,000 ETH at an average price of $3,807, committing over $300 million.
Additional buys later in August were made at even higher prices, pushing the blended cost basis well above long-term support levels. Smaller purchases in September did little to offset that exposure.
When Ethereum reversed, falling more than 28% over the past three months to around $2,980, the strategy quickly moved underwater.
By the time ETHZilla began trimming its holdings in late October, losses were already embedded. The company now faces unrealized losses tied to its earlier accumulation.
Corporate ETH Holdings Face Pressure as Losses Grow – Who Will Survive?
ETHZilla is not alone, as other major Ethereum treasury firms are also under strain.
BitMine Immersion Technologies, the largest corporate holder of ETH, is estimated to be sitting on billions of dollars in unrealized losses but has continued to accumulate and build a staking-focused business.
SharpLink Gaming, backed by Ethereum co-founder Joseph Lubin, remains committed to its ETH strategy despite market pressure, while firms such as Fundamental Global, The Ether Machine, and Quantum Solutions are also holding ETH below their average purchase prices.
At the same time, demand from corporate treasuries has slowed sharply. Data from Bitwise shows companies bought just 370,000 ETH in November, down more than 80% from August’s peak.
DefiLlama data also points to November as the weakest month of 2025 for digital asset treasury inflows, with Ether seeing net outflows even as Bitcoin treasuries continued to attract capital.
