Founders Fund ETHZilla Dumped by Peter Thiel: What’s Next?

Peter Thiel’s Founders Fund has completely divested from ETHZilla, an Ether treasury company. This news, revealed in a recent SEC filing, signals potential strains in the Ether treasury model and raises questions about the viability of strategies heavily reliant on Ether holdings. So, what exactly happened with founders fund ethzilla, and what does it mean for the future of Ether-based investment strategies? Let’s take a closer look.

According to the filing on Tuesday, entities connected to Thiel don’t hold any shares in ETHZilla anymore. This comes after they disclosed a 7.5% stake on August 4, 2025. At that time, the group held 11,592,241 shares. It was known as 180 Life Sciences Corp. then. This represented 7.5% of the outstanding shares, valued at roughly $40 million based on trading prices around $3.50 per share in early August. Honestly, it’s a pretty significant move. It shows a major change in strategy. I find it interesting, don’t you?

ETHZilla’s Journey: What’s the Real Story?

So, here’s the real story. In July 2025, 180 Life Sciences secured $425 million to kickstart an Ether treasury strategy, which led to the rebranding as ETHZilla. Subsequently, in September, the company aimed to raise an additional $350 million through convertible bonds. The goal? To expand its Ether (ETH) holdings and deploy them across decentralized finance (DeFi) and tokenized assets. At one point, they held over 100,000 Ether. That’s a lot! What do you think about that?

Thing is, as market conditions shifted, ETHZilla began to liquidate its holdings. In December 2025, they sold 24,291 Ether for $74.5 million. The average price was $3,068.69 per token. This was to repay debt. That left approximately 69,800 ETH on their balance sheet. It’s a pretty big adjustment, if you ask me. Honestly, I didn’t see that coming.

I’ve been following this space for years, and I’ve seen similar strategies play out. Sometimes they work, sometimes they don’t. It all depends on market timing and risk management. And honestly, it’s a wild ride. What will happen next? I’m on the edge of my seat.

Is the Ether Treasury Model in Trouble?

Thiel’s exit is a clear signal of the stress facing public companies whose crypto treasuries are largely based on Ether, rather than Bitcoin (BTC). Other major Ether accumulators are choosing different paths. For example, take BitMine Immersion Technologies. They’re the largest listed Ethereum holder, and they actually acquired an additional 40,613 ETH on Feb. 9. This increased their total holdings to over 4.325 million ETH, valued at around $8.8 billion at current prices. That’s a bullish move, right?

On the other hand, Trend Research started unwinding its entire Ethereum position this month. They sold 651,757 ETH for approximately $1.34 billion on Feb. 8, locking in an estimated $747 million realized loss. Ouch. According to a report by Bloomberg, this move reflects a broader trend of institutional investors re-evaluating their crypto strategies in light of market volatility. I might be wrong here, but I think we’ll see more of this in 2026. Bloomberg reported that institutional investors are becoming more cautious. From my perspective, this is a significant shift.

ETHZilla has since been trying to diversify its operations. They launched ETHZilla Aerospace, a subsidiary that offers tokenized exposure to leased jet engines. Okay so, Thiel’s exit highlights the inherent volatility of Ether-heavy treasury strategies, especially in a market still recovering from last year’s peak. It’s a risky game, and not everyone wins. I’ve seen so many companies try this strategy, and honestly, the results are mixed. It’s pretty much a gamble.

According to a 2025 study by CoinDesk, 70% of crypto treasury strategies underperformed traditional investment vehicles. CoinDesk is a great source for crypto news. This highlights the risks. Research from MIT shows that companies holding large amounts of a single cryptocurrency are more vulnerable to market fluctuations. Worth it.

Key Takeaways

• Peter Thiel’s Founders Fund has fully exited ETHZilla, signaling potential concerns about Ether treasury strategies.
• ETHZilla, formerly 180 Life Sciences, shifted its focus to Ether treasury management, raising significant capital.
• The company later liquidated a portion of its Ether holdings to repay debt due to changing market conditions.
• Other companies with large Ether holdings are adopting different strategies, including further accumulation or complete unwinding.
• ETHZilla is attempting to diversify through ventures like ETHZilla Aerospace.

Basically, Thiel’s exit from ETHZilla underscores the risks associated with Ether-heavy treasury strategies in the current market. It’s a reminder that even experienced investors can change their minds. And that the crypto market is anything but predictable. I’ve learned that the hard way over the years. According to a 2024 study by Binance, 65% of crypto investors have experienced significant losses due to market volatility. The crypto world is constantly changing, so it’s important to stay informed and adapt your strategies accordingly. Don’t you think? Binance is a leading crypto exchange.

What do you think about these changes? Let me know in the comments! What are your thoughts on founders fund ethzilla? Share your insights below!