Peter Thiel’s Founders Fund Sells Out of ETHZilla as Ether‑Heavy Treasury Models Feel the Pressure
Los Angeles, Feb. 27 2025 – Billionaire tech investor Peter Thiel’s venture capital vehicle, Founders Fund, has completely divested its stake in the publicly‑listed Ether treasury firm ETHZilla, according to a filing with the U.S. Securities and Exchange Commission on Tuesday. The move underscores growing concerns among investors about the volatility of corporate strategies that rely heavily on Ethereum (ETH) rather than Bitcoin (BTC).
Background
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Initial investment: In August 2024, the Thiel‑linked entities disclosed a 7.5 percent holding in the company (then called 180 Life Sciences Corp.), amounting to 11,592,241 shares out of 154,032,084 outstanding. At the time, the block was valued at roughly $40 million, based on a share price near $3.50.
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Rebranding to ETHZilla: After raising $425 million in July 2025, 180 Life Sciences pivoted from biotech to cryptocurrency, rebranding itself as ETHZilla and announcing an “Ether treasury” strategy. A further $350 million of convertible bonds were issued in September to fund the purchase of additional ETH and to deploy the assets across decentralized finance (DeFi) and tokenised real‑world assets. At its peak the firm owned more than 100,000 ETH.
- Recent liquidation: In December 2025, ETHZilla sold 24,291 ETH for $74.5 million, an average price of $3,068.69 per token, to service its debt. The transaction left roughly 69,800 ETH on the balance sheet.
The SEC Filing
A 13‑G amendment filed on Tuesday shows the Founders Fund now holds zero shares of ETHZilla, effectively ending its involvement. The filing, posted on the SEC’s EDGAR system, replaces the earlier 13‑G report that documented the 7.5 percent stake.
Market Context: Ether‑Heavy Treasury Firms Under Strain
The exit is part of a broader pattern of pressure on corporations that have chosen Ethereum as their primary treasury asset:
| Company | Recent Action | ETH Position (approx.) | Notable Outcome |
|---|---|---|---|
| BitMine Immersion Technologies | Bought an additional 40,613 ETH on Feb 9 2025 | 4.33 million ETH (≈ $8.8 billion) | Reinforcing a Bitcoin‑heavy outlook, the firm continues to expand its Ethereum exposure despite market turbulence. |
| Trend Research | Sold 651,757 ETH on Feb 8 2025 for $1.34 billion | 0 ETH (complete unwind) | Realised an estimated $747 million loss, illustrating the downside risk of large‑scale ETH holdings. |
| ETHZilla | Launched ETHZilla Aerospace, a tokenised jet‑engine leasing platform | ~69,800 ETH (post‑liquidation) | Diversification attempt aimed at generating non‑ETH revenue streams. |
These moves reveal a divergence in how listed companies are coping with Ethereum’s price volatility. While some, like BitMine, are doubling down, others are trimming or fully exiting their positions.
Analysis
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Liquidity Challenges: ETHZilla’s December liquidation highlighted a need for cash to meet debt obligations. The decision to sell roughly a quarter of its holdings at a price that was still above the early‑2024 lows, but well below the 2023 peak, suggests that the firm prioritized debt service over holding for potential upside.
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Investor Sentiment: The Founders Fund’s exit may be interpreted as a signal to other institutional investors that Ether‑centric treasury models are now riskier than previously thought. Thiel’s venture capital arm is known for backing innovative, high‑growth ideas; its withdrawal could temper enthusiasm for similar strategies.
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Strategic Diversification: ETHZilla’s foray into tokenised jet‑engine leasing signals a broader trend where crypto‑focused firms seek ancillary revenue streams to offset the unpredictability of crypto markets. However, the success of such initiatives remains uncertain, especially given the nascent regulatory environment for tokenised real‑world assets.
- Comparative Resilience of BTC‑Heavy Firms: Companies that maintain a larger proportion of Bitcoin in their treasuries have, in recent weeks, appeared more resilient, largely due to Bitcoin’s comparatively lower volatility and broader institutional acceptance.
Key Takeaways
- Founders Fund fully divested from ETHZilla, removing a $40 million stake and ending its involvement in an Ether‑centric treasury play.
- ETHZilla’s remaining ETH balance (~70k tokens) is a fraction of its earlier peak, reflecting ongoing liquidity‑driven sales.
- Market participants are reassessing Ether‑heavy treasury models, with some firms expanding holdings (BitMine) while others execute large‑scale exits (Trend Research, ETHZilla).
- Diversification into tokenised real‑world assets may become a common hedge, but the economic viability of such ventures is still unproven.
- Bitcoin‑dominant treasury strategies appear comparatively more stable, potentially influencing future corporate crypto‑allocation decisions.
As the cryptocurrency market continues to absorb the aftershocks of last year’s peak, the strategic choices of high‑profile investors like Peter Thiel will likely shape the next wave of corporate treasury policies. Stakeholders should monitor both price movements and regulatory developments that could further impact the viability of Ether‑centric balance sheets.
Source: https://cointelegraph.com/news/peter-thiel-founders-fund-exits-ethzilla-stake?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
