Peter Thiel's Founders Fund has fully exited its stake in ETHZilla, a digital asset treasury firm holding Ethereum (ETH), as the company's pivot to a crypto reserve strategy buckles under a sustained market downturn that has sent ETH down more than 50% since its recent highs.
What Happened: Thiel Fund Exits ETHZilla
In Aug. 2025 that Thiel controlled a 7.5% stake in ETHZilla through entities such as The Founders Fund. The latest SEC filing, however, shows those entities reported zero ownership in the company by the end of 2025 — a complete exit.
ETHZilla, which previously operated as 180 Life Sciences before rebranding around an Ethereum treasury strategy, held more than 100,000 ETH at its peak. As market conditions worsened in October, the company offloaded roughly $40 million in Ether to fund share buybacks.
A second round of sales followed in December, totaling about $74.5 million, with proceeds used to repay senior secured convertible debt. CoinGecko data shows the company now holds 69,802 ETH.
Ethereum fell 28.4% in Q4 2025, its first negative fourth quarter since 2022. ETH closed Jan. 2026 down 17.7%, and so far in February, the price has dropped another 18.1%, trading at $2,017 at press time.
Also Read: What Keeps Ethereum Trapped Below $2,000?
Why It Matters: Treasury Model Strain
The sustained price decline has directly eroded the value of corporate crypto holdings and pressured stock prices across the sector. BitMine, for instance, is sitting on unrealized losses exceeding $7 billion, with its share price down 25.7% year-to-date.
The broader digital asset treasury wave gained momentum last year as firms adopted Strategy's (formerly MicroStrategy) 2020 Bitcoin (BTC) playbook, accumulating crypto as reserve assets.
That strategy now faces its first real stress test. ETHZilla has since outlined yet another pivot — its wholly owned subsidiary, ETHZilla Aerospace, is seeking to provide tokenized exposure to equity in leased jet engines.
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