ETHZilla struggles to find footing as Peter Thiel’s Founders Fund exits

ETHZilla Corp (ETHZ) shares faced intense pressure in pre-market trading this Wednesday following news that billionaire investor Peter Thiel and his venture firm, Founders Fund, have completely liquidated their position.

The Thiel exodus: Founders Fund liquidates stake in ETHZilla

The stock, which has already plummeted over 97% from its 2025 highs, hit a pre-market low of $3.33, representing a 5.13% drop from its previous close.

The sell-off was triggered by a late Tuesday SEC filing revealing that Thiel’s entities now hold zero shares in the company. This marks a dramatic reversal from August 2025, when the fund disclosed a significant 7.5% stake.

At the time, Thiel’s entry was seen as a massive vote of confidence for ETHZilla’s pivot from biotechnology to a corporate Ethereum (ETH) treasury model.

The massive sell-off marks a dramatic fall from grace for the firm, which rebranded from 180 Life Sciences last year to become a high-leverage Ethereum treasury. While the initial pivot drew over $425 million in institutional backing, the recent liquidation of its ETH holdings has left investors questioning the sustainability of its ‘crypto-first’ balance sheet.

Crisis in the ETH treasury model

The full exit by Founders Fund underscores the growing skepticism surrounding companies that use high-leverage strategies to accumulate Ethereum. While similar “Bitcoin treasury” plays have remained popular, Ether-focused firms like ETHZilla have struggled under the weight of market volatility and debt obligations.

ETHZilla has recently attempted to diversify its business to stabilize its balance sheet. Recent moves include:

• Asset Tokenization: Launching “ETHZilla Aerospace” to tokenize leased jet engines.
• Debt Repayment: Liquidating over 24,000 ETH in late 2025 to settle convertible bond obligations.
• Real Estate: Acquiring modular home loan portfolios for on-chain yields.

Despite these efforts to pivot toward Real World Assets (RWA), the market appears focused on the loss of its most prominent institutional backer. For many investors, Thiel’s departure signals that the “Saylor-style” accumulation strategy for Ethereum may be facing a structural breakdown.