Peter Thiel’s Founders Fund Exits ETHZilla as Ethereum Treasury Model Faces Market Strain

Billionaire investor Peter Thiel has pulled his venture firm entirely out of ETHZilla, marking a notable shift in institutional positioning as Ethereum-based treasury companies grapple with sustained market weakness.

Entities tied to Thiel’s Founders Fund previously controlled a 7.5% stake in ETHZilla, according to earlier disclosures. However, a recent filing with the U.S. Securities and Exchange Commission confirms that by the end of 2025, the fund had reduced its ownership to zero—signaling a complete exit.

The move comes at a time when digital asset treasury strategies are under renewed scrutiny. Over the past two years, several companies mirrored the crypto reserve blueprint pioneered by Strategy, which began accumulating Bitcoin as a corporate treasury asset in 2020. As crypto prices surged, equity valuations of treasury-heavy firms climbed alongside them.

But the model has shown vulnerability in downturns—particularly for companies concentrated in Ethereum.

Ethereum’s Slide Pressures Treasury Firms

Ethereum posted a 28.4% decline in Q4 2025, its first negative fourth quarter since 2022. While January 2026 opened with a brief rebound, the recovery faded quickly. ETH ended January down 17.7%, followed by an additional 18.1% drop in early February, trading around $2,017 at the time of reporting.

This prolonged weakness has weighed heavily on firms holding large ETH reserves. Digital asset treasury companies have seen both their balance sheets and stock prices erode as the value of their crypto holdings shrinks.

BitMine, for example, is currently sitting on more than $7 billion in unrealized losses, with its shares down 25.7% year-to-date.

ETHZilla Cuts Holdings After Peak Accumulation

ETHZilla—formerly known as 180 Life Sciences before pivoting to an Ethereum-centric treasury strategy—once held over 100,000 ETH at its peak. As market conditions deteriorated in October during what traders dubbed the “10/10” or “Black Friday” crypto crash, the firm began actively reducing exposure.

By late October, ETHZilla had sold approximately $40 million worth of Ether, using the proceeds for share buybacks. A second wave of disposals followed in December, totaling roughly $74.5 million, with funds directed toward repaying senior secured convertible debt.

Current data indicates the company now holds 69,802 ETH, marking a significant reduction from its prior peak.

Pivot Toward Tokenized Aerospace Assets

In a further strategic shift, ETHZilla has outlined plans to expand beyond pure crypto treasury operations. Through its wholly owned subsidiary, ETHZilla Aerospace, the firm is seeking to offer tokenized exposure to equity in leased jet engines—blending blockchain infrastructure with traditional aviation assets.

Thiel’s exit may reflect broader recalibration among institutional investors as volatility persists. With Ethereum’s price trajectory still uncertain, treasury-heavy strategies tied to a single digital asset remain exposed to ongoing market swings.