First Coin

Peter Thiel exits ETHZilla as the company sells $74.5 million in ETH amid market pressure

In recent financial moves, Peter Thiel and his investment team at Founders Fund have sold a large amount of ether, the cryptocurrency also known as ETH. The sale happened through a company called ETHZilla Corp, and it means that Thiel’s groups no longer own any shares in ETHZilla. An official filing with the U.S. Securities and Exchange Commission (SEC) confirmed that Thiel’s entities have exited the company’s crypto business completely.

This big ether sale did not happen in isolation. ETHZilla has been selling ether in smaller amounts over the past months to deal with money problems and to buy back some stock. The company used to hold a lot of ETH, even more than 100,000 ether at its highest point, according to data from DefiLlama, a website that tracks crypto holdings and prices.

ETHZilla’s story is a reminder of how hard it can be to manage a business whose main purpose is to hold a volatile asset like ether. The company is based in Palm Beach, Florida. It began life in a different field and then made a big change. In August, ETHZilla fully shifted its focus to cryptocurrency management. It changed its name from 180 Life Sciences Corp., a biotech company, to reflect its new direction in crypto assets. This kind of pivot—changing the company’s core business—can happen when leaders see a new opportunity or a new market situation. But it also comes with big risks, especially when the market is moving up and down quickly.

The move to crypto came as the overall cryptocurrency market was going through a downturn. Ether prices had dropped a lot from their peak last year—about a 60% fall—placing pressure on ETHZilla’s new treasury of ETH. When a company holds assets that can swing in price by large amounts, those gains and losses can affect the company’s ability to borrow money, pay bills, and fund operations. At the time of this report, ether was trading around $2,000 per coin, a level that has weighed on many crypto businesses and investors.

To keep its finances stable, ETHZilla sold ether in two big steps. The first sale happened in October. The company liquidated around $40 million worth of ETH to repurchase its own stock. In plain words, it traded ether for the company’s own shares so that shareholders could own more of the company and the company could raise money by giving back equity to investors. The second sale took place in December, when ETHZilla sold about $74.5 million worth of ether. This sale was done to repay senior secured convertible notes. A convertible note is a kind of loan that can be turned into company shares later on, giving investors the option to own a stake in the company if certain conditions are met. In this case, the notes were used to raise money earlier, and selling ETH helped ETHZilla pay back those debts.

What is an asset like ether doing inside a public company’s treasury? In ETHZilla’s case, the plan was to use cryptocurrency holdings to build value for the business and its investors. But ether’s price swings made it hard to guarantee a steady source of cash. When prices fall, a treasury that is heavily invested in crypto can face big paper losses. That is part of the reason the company has had to liquidate some of its ether to meet financial obligations and keep the business solvent.

Beyond just buying and selling ether, ETHZilla has also been exploring a shift in what its business can offer. The company has started a subsidiary named ETHZilla Aerospace. This new arm aims to offer tokenized equity in leased jet engines. In simple terms, tokenized equity means turning a real asset—like a jet engine that earns money through leases—into digital tokens that can be bought and sold by investors. Investors would own a share of the revenue generated by the engine leases through these digital tokens, instead of owning the physical engine itself. This approach is part of a broader move by some crypto-focused companies to offer investments tied to real-world, tangible assets rather than only digital assets like cryptocurrency.

ETHZilla has not issued public statements about Thiel’s exit or the most recent ETH sales. Still, many observers say the moves illustrate the financial pressures that can come with running a crypto-focused public company. When a business relies heavily on a volatile asset, the price moves of that asset can quickly change the company’s financial picture. High-profile investors like Thiel stepping back from a crypto-focused business also signals a cautious mood in the market. In recent times, some big names have started sounding a note of caution about the risks of owning or managing large ether holdings in a publicly traded company.

From a broader point of view, the ETHZilla situation highlights two important ideas in the world of digital finance. First, it shows how quickly a company’s strategy can change in the crypto space. ETHZilla began as a biotech company, then changed course to become a crypto manager with a treasury of ether and an eye toward asset-backed ventures. Second, it shows the ongoing tension between growth and risk in crypto markets. Investors want to see strong revenue and a clear plan for profits, but the market can swing widely in short periods of time. Those swings can force tough choices, like selling ether to cover debts or to repurchase stock, or like starting new business lines that rely on blockchain technology and real-world assets.

What investors and market watchers will be watching next is ETHZilla’s new aerospace project and how it fits into the company’s overall plan. If ETHZilla can successfully manage a mix of real-world assets and crypto holdings, it might build a new kind of revenue stream. Companies in this space sometimes try to diversify away from pure cryptocurrency trading into things like asset-backed products, which can be more predictable and easier to explain to traditional investors. ETHZilla’s pivot to tokenized equity in leased jet engines is one example of this strategy, and it will be interesting to see whether such a plan can bring in steady income while still using blockchain technology to offer investment opportunities.

In the coming months, analysts will look for more information about ETHZilla Aerospace, how the company finances its operations, and whether the ETH holdings continue to be a central part of the business. The market’s reaction to these moves will also matter. If more investors show interest in asset-backed crypto products, ETHZilla’s approach could become more common. If not, the company could face further pressure to adjust its strategy again. The ability to adapt quickly is a hallmark of many tech and crypto companies, but it also carries risk because the crypto market can change rapidly and unpredictably.

The story of Peter Thiel’s exit from ETHZilla, along with the company’s decision to liquidate a large chunk of ETH, serves as a clear example of how personal investment, corporate strategy, market prices, and debt structure all interact in the modern crypto economy. For many people watching the space, this case underscores the need for careful planning, clear communication with investors, and a willingness to shift gears when market conditions change. It also suggests that the future of some crypto companies might lie in combining digital assets with real-world investments, rather than relying solely on the performance of digital currencies alone.

Definitions

Notes for readers: Ether (ETH) is a cryptocurrency used on the Ethereum network. A tokenized asset means a digital token on a blockchain that represents a real-world asset, such as a jet engine lease, giving investors a share of the asset’s income.

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