Founders Fund under Peter Thiel sells all ETHZilla shares, revealing the limitations of cryptocurrency treasury strategies

Peter Thiel’s Founders Fund has disclosed in SEC filings that it has liquidated all of its ETHZilla shares. As of the end of 2025, the fund’s holdings in this asset have been reduced to zero, representing a complete withdrawal from the 7.5% stake held last August. This move symbolizes a rapid shift in market sentiment regarding investments in crypto-related treasury companies.

Founders Fund’s Strategic Shift: From 7.5% to Zero Holdings

The complete divestment of ETHZilla by Peter Thiel’s Founders Fund suggests a wavering confidence in digital asset treasury (DAT) strategies. The filings do not specify the timing or price of the sales, but when the fund first disclosed its position, the stock price was already surging.

At that time, the market was focused on MicroStrategy (MSTR) led by Michael Saylor, which was heavily invested in Bitcoin, inspiring many companies to follow this treasury model. Founders Fund, under Thiel’s leadership, appeared to have capitalized on this trend by investing in ETHZilla, but deteriorating market conditions later forced a reassessment of their strategy.

ETHZilla Stock Plummets 95%: Rapid Asset Offloading During Bubble Burst

Originally a biotech company called 180 Life Sciences, ETHZilla later pivoted significantly toward becoming an Ethereum treasury enterprise. At its peak, it accumulated over 100,000 ETH, but following market corrections in October 2025, it began rapidly liquidating its positions.

The stock hit an all-time high of approximately $107 in August 2025 but then sharply declined. By December 30, the price had fallen to just $4.99, losing 95% of its value within a few months. This drastic decline was driven by ETHZilla’s aggressive position reductions, including selling $75 million worth of ETH in October and an additional sale of the same amount in December, which was used to reduce convertible debt.

Decline of Crypto Treasury Strategies: Market Bubble Reality

Crypto treasury-related stocks, once highly regarded, have rapidly lost value since October 2025. Many high-growth DAT companies have seen their prominence fade, forcing them to pivot their business models again.

ETHZilla also succumbed to this trend, spinning off ETHZilla Aerospace in February 2026 and announcing a shift toward tokenized jet engine leasing exposure. This indicates a waning investor support for traditional Ethereum holdings strategies.

Current Market Environment: Bitcoin Decline and Stablecoin Inflows

As of March 2026, the crypto market remains in a correction phase. Bitcoin (BTC) trades around $67.27K, down 1.51% in 24 hours. Ethereum (ETH) is trading near $1.97K, with overall market sentiment remaining soft.

On-chain data shows approximately 43% of Bitcoin supply is currently at a loss, exerting ongoing selling pressure. Meanwhile, inflows of stablecoins have surged, amid continued geopolitical tensions in the Middle East, suggesting that waiting funds may re-enter the market.

These market dynamics reflect that the decision by Peter Thiel’s Founders Fund to fully divest from ETHZilla is a response to overall market uncertainty and shifting investor psychology. While crypto treasury strategies once garnered significant attention, the current market reality continues to reveal the limitations of short-term trends.