According to the latest filings with the U.S. Securities and Exchange Commission (SEC), Peter Thiel's Founders Fund has completely divested from ETHZilla, previously holding a 7.5% stake. By the end of 2025, the investment entity associated with Thiel had cleared all its holdings, marking a formal retreat from the Ethereum-dominated public treasury model by this well-known venture capital firm.
ETHZilla, which transitioned from a biotech company to an Ethereum treasury operator, adopted an aggressive strategy. The company raised $425 million in funding and an additional $350 million through convertible bonds, accumulating over 100,000 ETH in an attempt to create a highly leveraged equity instrument with exposure to Ethereum. However, this debt-dependent expansion model revealed critical flaws during market downturns.
In December 2025, to repay its debts, ETHZilla was forced to sell 24,291 ETH, coinciding with a period of low market prices, which sparked widespread concerns about the sustainability of leveraged crypto treasuries. The combination of debt and the high volatility of crypto assets made it highly susceptible to forced liquidations during market corrections, creating a vicious cycle.
Compared to Bitcoin's simple "holding is the strategy" model, Ethereum treasury schemes are more complex: they require participation in staking, DeFi News liquidity mining, and other operations, introducing additional variables such as smart contract vulnerabilities, protocol risks, and counterparty defaults. These non-price factors significantly increase operational difficulty and systemic risk.
As a significant supporter of the Ethereum ecosystem, Peter Thiel has always been known for his contrarian thinking, but even so, his fund chose to exit decisively in the early stages of risk accumulation. This move not only reflects the operational difficulties of individual companies but also suggests a weakening market confidence in the "financialized crypto assets" model—investors are increasingly realizing that strategies relying solely on leverage to amplify returns cannot withstand long-term market volatility.
Currently, as the price of Ethereum has significantly retreated from its summer 2025 high, ETHZilla's stock price has also plummeted, further confirming the vulnerability of leveraged crypto treasuries in a bear market. The industry is beginning to re-examine whether to prioritize more stable, low-complexity asset allocation methods rather than pursuing high-yield but high-risk structured products.
This exit may mark a shift in crypto asset treasury management from an era of "aggressive expansion" to one of "capital discipline."