Peter Thiel Abandons ETHZilla, Shaking Confidence in the Ethereum Treasury Experiment

When Peter Thiel first backed ETHZilla, the move was hailed as a bold endorsement of Ethereum’s growing role in corporate finance. Now, less than a year later, the billionaire investor and his venture capital firm, Founders Fund, have fully exited their position in the Nasdaq-listed Ethereum treasury company, according to a recent filing with the U.S. Securities and Exchange Commission.

The filing confirms that Founders Fund reduced its ownership to 0% by early 2026, closing a chapter that began with a 7.5% stake acquired during a $581 million capital raise in August 2025. That funding round transformed what had once been a biotech company, formerly known as 180 Life Sciences, into a digital asset treasury vehicle focused on accumulating Ethereum and generating on-chain yield through decentralised finance protocols.

The exit was disclosed under Schedule 13G, the passive investor rule, indicating that Founders Fund had not sought to influence management or control prior to divesting. The withdrawal, however, carries symbolic weight. Thiel’s early participation lent credibility to ETHZilla’s pivot, reinforcing the narrative that Ethereum could underpin a new generation of corporate balance sheets.

Market reaction was swift. Shares fell roughly 3% in after-hours trading following news of the complete divestment, adding to a broader decline that has seen the stock lose 28% year-to-date. The retreat underscores the volatility inherent in public companies whose fortunes are tightly bound to digital asset markets and investor sentiment toward Web3 infrastructure.

Despite the loss of its most prominent institutional backer, ETHZilla remains far from marginal. The company holds approximately 82,186 ETH, valued at around $349 million, alongside $238 million in cash reserves. Its strategy mirrors that of Bitcoin treasury firms but substitutes Ethereum’s programmable ecosystem for Bitcoin’s store-of-value thesis. By leveraging DeFi protocols, the firm seeks to generate yield on its holdings rather than simply warehouse tokens.

In parallel, ETHZilla has attempted to broaden its Web3 footprint. Through its subsidiary ETHZilla Aerospace, the company recently launched the Eurus Aero Token I, a vehicle designed to tokenize aircraft engine leasing. The initiative reflects a broader push to bring real-world assets on-chain, targeting sectors such as auto loans and commercial real estate. Tokenization of RWAs has become a central theme in blockchain finance, promising efficiency gains and fractional ownership, though adoption remains uneven.

Thiel’s exit may signal recalibration rather than repudiation. Venture capital has historically moved quickly in and out of high-risk bets, particularly in sectors where regulatory frameworks, liquidity conditions and macroeconomic pressures can shift rapidly. Ethereum’s long-term proposition remains intact: a permissionless, censorship-resistant network enabling decentralized applications and financial infrastructure without centralized gatekeepers.

Ethereum co-founder Vitalik Buterin recently reiterated that the network “is not his or any single group’s property,” emphasizing that participation does not require alignment with his personal views on DeFi, artificial intelligence or politics. The protocol’s neutrality is part of its design—anyone can deploy applications or move funds without seeking approval from him, the Ethereum Foundation or core developers.

For ETHZilla, the challenge now is to prove that its model can withstand both market turbulence and the departure of marquee backers. For investors, Thiel’s retreat raises a broader question: are Ethereum treasury companies a durable financial innovation, or a speculative bridge between traditional equity markets and the volatile world of crypto assets?