Did Thiel exit ETHZilla after 97% drop?
2026-02-20 • Samuel Morales
TL;DR
Peter Thiel's Founders Fund has fully exited its stake in ETHZilla (NASDAQ: ETHZ), a company that saw its stock plummet from $107 in August 2025 to around $3 by February 2026—a staggering 97% decline. This dramatic downturn underscores the risks associated with crypto-centric treasury strategies and highlights the importance of diversified, sustainable financial planning for companies seeking funding.
The Rise and Fall of ETHZilla: A Cautionary Tale
ETHZilla, formerly known as 180 Life Sciences, shifted in August 2025 by rebranding and embracing an Ethereum-focused treasury strategy. This drew attention from Peter Thiel’s Founders Fund, which acquired a 7.5% stake, sending the stock to $107. But that enthusiasm faded. By February 2026, the stock had fallen to around $3, a 97% drop. A major driver was a nearly 30% drop in Ethereum's price in late 2025, which dragged the company into early 2026.
Diversification: A Key to Financial Stability
ETHZilla attempted to shore up finances by launching ETHZilla Aerospace, a venture to tokenize real-world assets like leased jet engines, aiming for steadier income streams beyond crypto. Diversification can act as a shield against concentrated risk. For firms seeking funding, balancing asset types can help weather market swings. But new ventures take time to pay off; don't expect instant stability.
The Perils of Overreliance on Crypto Assets
ETHZilla accumulated over 100,000 ETH tokens in hopes of riding Ethereum's gains. Crypto volatility forced them to sell about $114.5 million worth of ETH by late 2025 to cover debts, trimming holdings to roughly 69,800 ETH. The takeaway: crypto can deliver big rewards, but its volatility can threaten a company's finances if not managed carefully.
Lessons for Companies Seeking Funding
Assess Risk Tolerance
Know how much risk your company can tolerate without tipping over. High stakes may bring big wins but also steep downsides.Diversify Investments
Don't put all eggs in one basket. A diversified mix cushions the impact when one investment tanks.Maintain Liquidity
Ensure you have enough cash or liquid assets to cover operations without having to sell investments at a loss.Stay Informed
Crypto markets move fast. Monitor trends and regulations to avoid surprises.Develop a Robust Financial Strategy
Craft a plan aligned with your goals and risk appetite, balancing growth with safety nets.
FAQs
Q: Should my company invest in cryptocurrencies?
A: Cryptos can offer high returns but come with significant volatility. Assess risk tolerance and consider diversification to mitigate losses.
Q: How can diversification benefit my company?
A: Diversification spreads risk across assets, reducing the impact of underperforming investments on the overall portfolio.
Q: What steps can we take to ensure financial stability?
A: Develop a comprehensive strategy including risk assessment, diversification, liquidity management, and ongoing market analysis.
In the end, ETHZilla’s story is a powerful reminder: relying too heavily on unstable assets can be risky. For those seeking funding, blending multiple asset classes with a solid plan is not just smart — it’s essential for long-term resilience.