Debt, not stacking, now drives ETHZilla’s ETH moves
ETHZilla Corp. (Nasdaq: ETHZ), the Ethereum treasury vehicle backed by Peter Thiel’s Founders Fund, has started selling its core asset to meet liabilities. In a Form 8-K filed on December 19, the company disclosed that it sold about 24,291 ether (ETH) since December 15, raising $74.5 million at an average price of $3,068.69 per token to redeem senior secured convertible notes.
The move comes just twelve days after ETHZilla announced plans to redeem in full $516 million of 2028 convertible notes at 117% of face value, plus accrued interest, by December 30, 2025, in a separate press release. The new filing states that ETHZilla expects to use all or most of the ETH sale proceeds for that mandatory redemption, alongside restricted cash that it already pledged as collateral.
ETH barely reacted. Spot ETH traded around $2,981 on Monday afternoon, down less than 1% on the day, while ETHZilla’s sale price sat roughly 3% above that level. ETHZilla’s stock took the hit instead. Shares slipped about 8% to $6.32 in late U.S. trading, leaving the Thiel-backed name more than 95% below its August peak near $174.60, according to Barchart data.
From ETH hoarder to balance-sheet triage
The same playbook that turned 180 Life Sciences into ETHZilla now binds it. The company raised more than $500 million this year through private placements and secured convertible notes to build an ether hoard, then watched its equity rocket as traders treated ETHZ as a levered proxy on ETH. A July financing to launch “ETHZilla” as an Ethereum treasury vehicle came alongside a $425 million PIPE backed by a consortium of digital asset investors, as detailed in a July 29 press release.
By late August, ETHZilla reported 102,237 ETH on its balance sheet at an average acquisition price of $3,948.72, plus roughly $215 million in cash, alongside a board-authorized $250 million stock buyback program, according to its buyback announcement. That arsenal helped fuel a parabolic move in the stock, with ETHZ drawing explicit comparisons to Strategy’s bitcoin playbook in coverage from outlets including Investopedia and Barron’s.
Since then, ETHZilla has started to run the machine in reverse. On October 24 it sold about $40 million of ETH and redirected the cash into repurchasing roughly 600,000 shares, as it later confirmed in an October 27 press release. Management framed that step as an attempt to close a widening discount between the firm’s market value and the net value of its ETH and cash holdings.
The December ETH sale lands in a different bucket. ETHZilla now says it expects to dedicate “all, or a significant portion” of the $74.5 million to redeem senior secured notes under a Note Mandatory Redemption Agreement that it signed with its noteholder, a structure laid out in earlier SEC filings on its $350 million add-on convertible deal. After the latest sale, ETHZilla still holds about 69,800 ETH, according to the same 8-K.
Thiel still backs ETHZilla, but the flywheel cracked
Peter Thiel’s Founders Fund helped ignite the story. Coindesk reporting in August showed that the fund built a 7.5% stake in ETHZ, turning the obscure biotech pivot into a marquee bet on Ethereum treasuries. Subsequent SEC ownership filings and coverage from outlets such as PANews show that Founders Fund trimmed that position to about 5.6% of outstanding shares by September 30, or 928,389 shares.
Thiel’s involvement still shapes sentiment. Bloomberg’s latest piece on the new ETH sale framed ETHZilla as a crypto “hoarder” that now sells tokens to pay down debt as “one of the stock market’s hottest trades” unwinds. ETHZ faces the same math that confronts other digital asset treasury stocks. Once the ratio of market cap to net asset value, or mNAV, slips below 1, each new equity raise or debt deal stops adding to per-share ETH and starts eroding it, a dynamic that analysis from outlets like BlockBeats and Odaily has highlighted across this niche.
“We are strengthening our balance sheet and maximizing financial flexibility through this opportunistic redemption,” ETHZilla CEO McAndrew Rudisill said on December 10, when he outlined the plan to take out the 2028 notes early.
The company now leans on a mix of ETH sales, restricted cash and planned real-world asset tokenization to handle that debt stack. ETHZilla recently announced a partnership with Liquidity.io, a regulated ATS operator, to build out tokenized RWA products on Ethereum Layer 2, alongside equity investments in platforms like Karus and Zippy, according to an October 23 corporate update.
ETHZilla’s December 19 8-K also signals a tighter disclosure rhythm. The company told investors it will report material changes in its ETH holdings and share count through SEC filings, press releases, its website and posts on its X account, rather than constant running commentary. For traders who treated ETHZ as a transparent, levered ETH tracker, the latest move makes the ticker look less like a simple ETH proxy and more like a stressed small-cap credit story wrapped around a still-large on-chain treasury.
