Founders Fund, the US-based venture capital firm backed by prominent technology investor Peter Thiel, has divested all of its holdings in ETHZilla, a company focused on Ethereum treasury operations. According to documents submitted to the US Securities and Exchange Commission, Founders Fund’s stake in ETHZilla dropped to zero as of early 2026. This move marks the end of the fund’s once sizeable 7.5% ownership in the company and signals a notable shift in Thiel’s approach to digital asset investments.
Strategic Shift Follows Rapid Rise
Founders Fund’s decision to offload its entire position came on the heels of a period of rapid growth for ETHZilla in August 2025. Around that time, the firm had participated in a major capital increase, investing as part of a $581 million funding round amid ETHZilla’s transformation. Previously operating in the biotech industry, the company underwent a rebranding and pivot, redirecting its focus from biotechnology to digital asset management and accumulating Ethereum on its balance sheet.
Share Sale Triggers Market Reaction
Data disclosed to the SEC showed that by September 2025, Founders Fund’s ownership in ETHZilla had already fallen to 5.6%. With the final exit in January 2026, the fund now holds no shares in the company. The news triggered a 3% drop in ETHZilla’s stock price during after-hours trading, reflecting investor uncertainty. Since the start of the year, shares have slid 28% overall, increasing scrutiny of the company’s long-term positioning.
Despite these fluctuations, ETHZilla continues to play a noteworthy role in the corporate treasury segment. The company currently holds approximately 82,186 ETH—worth around $349 million—in digital assets, complemented by a cash reserve of $238 million. These reserves underscore its ongoing significance in institutional markets, even amid major shareholder exits.
Product Launches and Web3 Focus Continue
The exit of Founders Fund and Peter Thiel is viewed by many as a signal of shifting strategies within the crypto sector. ETHZilla, however, remains committed to innovation in digital assets and Web3 technologies. The firm recently introduced the Eurus Aero Token I, developed via its subsidiary ETHZilla Aerospace, giving users a way to access the airplane engine leasing market through digital tokens. Additionally, ETHZilla is moving forward with projects focusing on tokenizing real-world assets (RWA) such as automotive loans and commercial real estate, aiming to bridge traditional finance and blockchain technology.
Meanwhile, developments in the Ethereum ecosystem have made headlines, particularly with comments from platform co-founder Vitalik Buterin. Buterin emphasized that Ethereum is not owned by any single person or team, highlighting the open, permissionless nature of the blockchain that allows anyone to participate without needing approval from foundation members or core developers.
Vitalik Buterin reiterated that developing applications or conducting transactions on Ethereum does not require consent from him, the Ethereum Foundation, or protocol developers, stressing the platform’s permissionless and censorship-resistant structure.
ETHZilla’s long-term vision rests on leveraging blockchain technology for both asset management and integration into conventional sectors. The company’s significant Ethereum holdings reinforce its stature within institutional circles. As Thiel and Founders Fund bow out, market watchers are closely monitoring ETHZilla’s next strategic moves and the formation of new partnerships.
