ETHZilla Raises $350 Million Through Convertible Debentures to Acquire More Ethereum

ETHZilla just pulled off a massive capital raise—$350 million worth of convertible debentures—all earmarked for Ethereum accumulation.

The Strategic Move

Instead of traditional equity financing, ETHZilla opted for convertible debt instruments that can later transform into equity. This approach lets them secure immediate capital while potentially minimizing dilution for existing shareholders.

Ethereum's Institutional Appeal

The targeted ETH purchase signals continued institutional confidence in Ethereum's long-term value proposition. While traditional finance types might scoff at 'internet money,' smart money keeps flowing into digital assets that actually generate utility.

Market Implications

A $350 million buy order could create significant upward pressure on ETH prices. Of course, Wall Street veterans will note this is just pocket change compared to their daily coffee budget—but in crypto terms, it's a serious position.

The move demonstrates how crypto-native companies are creating innovative financing structures while staying true to their digital asset convictions. Because nothing says 'we believe in decentralized finance' like good old-fashioned convertible debt paperwork.

ETHZilla sees a fresh injection of capital

In its press release, ETHZilla stated that it had reached an agreement with an existing institutional investor to amend earlier financing terms and raise $350 million in new convertible debentures. The deal adds to a $156.5 million tranche issued previously, taking the total value of the company’s debenture program to roughly half a billion dollars.

Under the newly revised structure, the earlier notes will remain interest-free until February 2026 before reverting to a 2% annual interest rate, which is half of the previously agreed 4% interest rate. 

The new debentures carry a 2% annual interest rate, while the conversion price was set at $3.05 per share.

“We are committed to being responsible stewards of our shareholders’ capital,” said McAndrew Rudisill, the company’s chairman and chief executive. “Our model is highly scalable, with fixed operating leverage and recurring positive cash flow. We believe ETHZilla is well-positioned for continued growth with the support of our institutional shareholders.”

Ethereum on the balance sheet

The deal boosts ETHZilla’s already substantial reserves of both ETH and cash. Currently, the company holds 102,264 ETH, with USD equivalents worth approximately  $462 million. It also has $559 million in cash and US Treasuries, 1.5 million earned protocol tokens, and 160,176,122 in total shares outstanding.

Beyond passive holdings, ETHZilla is pursuing a hybrid strategy where it is investing in short-term securities to generate yield and also investing ETH into ethereum scaling protocols as it explores the tokenization of real-world assets to generate more cash flow. The company has bought back roughly 6.45 million of its shares in September alone, reducing its outstanding stock by 0.3%.

The business model follows the trend of corporate entities acting as quasi-fund managers for digital assets. ETHZilla’s management has introduced new reporting metrics such as ETH Net Asset Value (NAV) and Market Net Asset Value (mNAV) to capture the value of its crypto-centric balance sheet. 

These measures, however, remain unconventional, with management warning they should not be confused with traditional net asset value calculations.

Supply squeeze and what it means for ETHZilla

The timing of ETHZilla’s financing coincides with mounting pressure on Ethereum’s liquid supply. Roughly 30% of the total supply of ETH has been reportedly staked. It was recently reported that this figure represents a record high and continues to climb.

Other observers note that ETHZilla’s approach mirrors the corporate treasury strategies pioneered by Bitcoin-focused companies, which helped tighten available supply and contributed to price surges in previous cycles. 

Management has promised fresh guidance with its third-quarter earnings later this year, outlining how it plans to balance ETH accumulation with cash-flow generation. 

ETHZilla’s latest financing shows that it has both the appetite for corporate ETH accumulation. With nearly half a billion dollars in convertible debentures now outstanding, the company has fresh firepower to deepen its presence in Ethereum’s Layer-2 landscape and tokenization projects.

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