Founders Fund, famed for its influential backer Peter Thiel, has sold its entire stake in ETHZilla—an Ethereum-based digital asset treasury player. This move, disclosed through a 13G filing with the U.S. Securities and Exchange Commission (SEC), brings to an end Founders Fund’s high-profile role in the company. Thiel and his fund have shaped many technology and cryptocurrency ventures in Silicon Valley, and their early investment was key to ETHZilla’s standing as a notable institutional force in the crypto market.
A Strategic Exit Hits ETHZilla’s Share Price
Just months ago, Founders Fund’s entry into ETHZilla helped double the company’s share price in short order—sending it soaring by almost 90 percent. However, as revealed in the new SEC filing, the fund has now divested its entire 7.5 percent holding, severing all remaining ties to the company. After the sale, ETHZilla’s stock slid seven percent in early trading, dipping as low as $3.20 per share—a breathtaking 97 percent below last summer’s peak of $107. The timing of Founders Fund’s sell-off is being interpreted as a signal that institutional enthusiasm for the digital asset treasury (DAT) business model is fading.
ETHZilla Pivots Toward Real-World Assets
ETHZilla, which has experimented with various strategies for managing crypto assets in its treasury from the outset, recently revealed a new focus: it plans to move beyond accumulating ETH and begin tokenizing real-world assets (RWAs) such as aircraft engines and mortgage loans. These traditional financial products would be made available on the blockchain, broadening the scope of the business. In line with its shift, the company recently bought back $40 million in ETH shares, while selling $74.5 million worth of ETH to manage debt. Currently, ETHZilla holds roughly 69,800 ETH, translating to a total asset value of $139 million at prevailing prices.
Founders Fund’s withdrawal from ETHZilla marks a significant shift in how institutional players approach risk and asset allocation in the crypto sector. The fund, which continues to hold other crypto investments, is seen as signaling a shift in strategy specific to ETHZilla. Especially amid recent market turbulence, investment professionals are growing increasingly selective in their risk assessments and decisions.
By industry standards, both the scale and financial performance of ETHZilla lag behind other major digital asset treasury firms. Despite holding substantial ETH positions, ongoing buybacks and debt management have sharply depleted the company’s reserves—raising questions about the sustainability of its long-term business model.
The willingness of institutional investors to stay on board will depend heavily on ETHZilla’s ability to execute its new business approach and generate revenue from tokenized real-world assets. Industry watchers suggest that the market will closely monitor how successfully ETHZilla can stabilize its share price through its push into the RWA segment.
On the other hand, Founders Fund’s full exit has been widely interpreted as waning institutional support for ETHZilla’s Ethereum-powered treasury model. However, commentators are quick to point out that the fund maintains positions in other crypto infrastructure firms, and this move does not constitute a wholesale exit from the market. Rather, it signals a broader trend of capital shifting with greater selectivity and focus.
Ultimately, ETHZilla’s prospects hinge on more than just accumulating crypto assets. Its success will depend on whether its innovative real-world asset tokenization projects gain market traction and deliver steady cashflow. The firm’s performance in this new direction will ultimately reveal if it can rekindle institutional interest.
