Billionaire venture capitalist and co-founder of PayPal and Palantir Technologies, Peter Thiel’s Founders Fund, has fully divested from ETHZilla, a digital asset treasury firm that holds Ethereum (ETH).
The development comes as digital asset treasury firms face mounting pressure amid the broader crypto market downturn.
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Peter Thiel Cuts Ties With ETHZilla During Crypto Market Slump
The digital asset treasury wave gained momentum last year, with several companies adopting Strategy’s (formerly MicroStrategy) 2020 Bitcoin (BTC) playbook. Firms began accumulating cryptocurrencies as reserve assets, attracting heightened investor attention as prices climbed and equity valuations expanded.
BeInCrypto reported in August 2025 that through entities such as The Founders Fund, Thiel controlled a 7.5% stake in ETHZilla. However, the latest SEC filing shows that entities managed by Thiel reported zero ownership in the company by the end of 2025, indicating a complete exit.
The move comes against the backdrop of a broader market downturn. In October, crypto markets suffered a sharp downturn, often referred to as the “10/10” or “Black Friday” crash. The subsequent months extended the decline.
According to CryptoRank data, Ethereum fell 28.4% in Q4 2025, marking its first negative fourth quarter since 2022. Although 2026 began with a brief recovery, the rebound quickly reversed.
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ETH closed January 2026 down 17.7%, and so far in February, its price has declined another 18.1%. At press time, it traded at $2,017.
Ethereum (ETH) Price Performance. Source: TradingViewTreasury Strategy Under Strain as Ethereum Decline Hits Corporate Holders
The sustained price weakness has directly impacted digital asset treasury firms, reducing the value of their crypto holdings and pressuring stock prices. For example, BitMine is currently sitting on unrealized losses exceeding $7 billion. Furthermore, its share price is down 25.7% year-to-date.
ETHZilla, which previously operated as 180 Life Sciences before pivoting toward an Ethereum treasury strategy and rebranding, has faced similar headwinds. At its peak, the company held more than 100,000 ETH.
As market conditions deteriorated in October, the company moved quickly to trim its exposure. Toward the end of that month, ETHZilla offloaded roughly $40 million in Ether, directing the proceeds toward share buybacks.
A second round of sales followed in December, totaling about $74.5 million. The funds were allocated to repay senior secured convertible debt. CoinGecko data shows the company now holds 69,802 ETH, a substantial reduction from its previous peak position.
The company has since outlined yet another strategic shift. According to Bloomberg, ETHZilla’s wholly owned subsidiary, called ETHZilla Aerospace, is seeking to provide tokenized exposure to equity in leased jet engines.
Source: https://beincrypto.com/peter-thiel-ethereum-treasury-exit/
