Tech investor Peter Thiel and affiliated entities linked to Founders Fund have fully exited their position in Ethereum treasury firm ETHZilla, according to a recent SEC Schedule 13G filing. The divestment marks a notable shift in institutional backing for publicly traded crypto treasury vehicles that gained traction during the 2025 digital asset rally.
Shares of ETHZilla declined sharply following the disclosure, extending a prolonged drawdown from their August peak after the firm’s pivot to an Ethereum-focused treasury model. The company’s valuation has compressed alongside broader weakness in crypto-linked equities and declining speculative appetite across digital asset markets.
Institutional Exit and Treasury Model Pressures
Thiel and Founders Fund initially acquired a 7.5% stake in 2025, coinciding with ETHZilla’s rebrand from a legacy biotech structure into a digital asset accumulation vehicle. At the time, institutional endorsement helped drive a surge in the stock as investors sought public market exposure to ether holdings and staking yield strategies.
Since then, the firm has reduced its Ethereum reserves through multiple sales, including liquidations to fund share repurchases and redeem outstanding convertible debt. This shift from accumulation to balance sheet optimization reflects growing pressure on treasury-style crypto companies to demonstrate sustainable capital management rather than pure asset hoarding.
The move also comes as institutional investors reassess the risk-return profile of single-asset treasury firms, particularly those tied to volatile crypto assets. Compared with diversified crypto ETFs and custody platforms, treasury vehicles remain highly sensitive to token price cycles and funding costs.
Strategic Pivot Toward Tokenization and RWA
Alongside trimming its ether exposure, ETHZilla has repositioned its long-term strategy toward real-world asset tokenization and yield-generating structures. The company has acquired portfolios of modular home loans and aviation-related assets with plans to tokenize them on Ethereum-based infrastructure, targeting double-digit annualized yields.
This transition aligns with a broader institutional trend toward tokenized credit and structured products, an area increasingly viewed as a scalable revenue driver compared with passive crypto treasury strategies. Asset managers and crypto-native firms are actively exploring tokenization as a bridge between traditional finance and blockchain-based settlement layers.
Despite recent sales, ETHZilla remains among the larger corporate holders of Ethereum, underscoring the growing presence of treasury companies in digital asset markets. However, the competitive landscape has intensified, with larger balance sheet players and ETF issuers offering more liquid and regulated exposure to ether.
The exit by high-profile backers such as Thiel may signal a maturation phase for crypto treasury equities, where institutional capital becomes more selective and performance-driven. As macro liquidity conditions tighten and crypto volatility persists, firms relying on treasury accumulation alone may face increased scrutiny relative to diversified, yield-oriented blockchain business models.
