ETHZilla Corp (ETHZ) came under sharp pressure in Wednesday pre-market trading after an SEC filing showed that Peter Thiel and his venture firm, Founders Fund, had fully exited their position. The stock fell to a pre-market low of $3.33, down 5.13% from the previous close.
The Tuesday filing showed Thiel-related entities now hold zero shares in the company. That is a major reversal from August 2025, when Founders Fund disclosed a 7.5% stake and was widely seen as backing ETHZilla’s strategic shift.
From biotech company to Ethereum treasury bet
ETHZilla was formerly known as 180 Life Sciences. After rebranding last year, the company shifted toward a high-leverage corporate Ethereum treasury model, using ETH on its balance sheet as the center of its new identity. At the outset, that strategy drew more than $425 million in institutional backing.
Share performance has since deteriorated badly. The report said the stock is now down more than 97% from its 2025 highs. After building around a crypto-first balance sheet and later liquidating ETH holdings, the company has left investors questioning whether the approach can hold up under stress.
Leverage, debt, and pressure on Ether-focused treasury firms
The complete sale by Founders Fund adds to concerns around companies using leverage to accumulate Ethereum. The article noted that while “Bitcoin treasury” trades have stayed popular, Ether-focused versions have struggled more under market volatility and debt obligations.
ETHZilla has tried to broaden its business in response. Its recent steps include launching “ETHZilla Aerospace” to tokenize leased jet engines, selling more than 24,000 ETH in late 2025 to repay convertible bond obligations, and acquiring modular home loan portfolios aimed at generating on-chain yield.
RWA pivot has not restored confidence
Those moves point to a partial shift toward real-world asset tokenization. Even so, the market reaction remains centered on the loss of the company’s highest-profile institutional backer. For many investors, Thiel’s exit reads as a sign that the Saylor-style accumulation strategy applied to Ethereum is facing deeper structural strain.
The pre-market drop is only the immediate response. The larger issue is that ETHZilla has moved from rebranding, to leveraged ETH accumulation, to asset sales for debt repayment, and now toward RWA initiatives without finding stable footing.