Peter Thiel and the founders have divested from the Ethereum treasury management company

ETH Treasury divestment

In a remarkable reversal for one of the most prominent institutional investors in cryptocurrency, billionaire Peter Thiel and his venture capital firm Founders Fund have completely divested from ETHZilla Corp. (NASDAQ: ETHZ), the prominent " Ethereum treasury" company that pioneered large-scale holdings of Ether (ETH) on its balance sheet.

The revised Schedule 13G/A tax filing submitted to the U.S. Securities and Exchange Commission (SEC) , released late on February 17, shows that entities affiliated with Thiel and Founders Fund report no shares and a net ownership stake of 0.0% as of December 31, 2025 — down from the 7.5% stake reported in August 2025.

The divestment, confirmed in major media outlets including Bloomberg, CoinDesk, CryptoSlate, and DL News, marks the end of a rapid divestment process that began with a gradual decline towards the end of 2025. At its peak, Thiel's position (through multiple companies) represented significant validation for the " digital asset treasury " (DAT) model — companies borrowing or raising capital to accumulate ETH as a primary reserve asset , similar to MicroStrategy's Bitcoin strategy but focused on Ethereum.

Developments over time and investment positions

• August 2025: Companies within the Founders Fund announced ownership of 11,592,241 shares (~7.5% stake) after ETHZilla shifted from the biotechnology sector to an ETH-based fund management model. This announcement triggered a massive price surge, with ETHZilla shares rising over 180% in a single day and peaking at around $174 or higher.

• September – November 2025: Position adjusted down to 928,000 shares (5.6%) following further adjustments amid weakening emerging markets.

• Q4 2025: Divestment completed, no remaining shares reported by the end of the year.

ETHZilla itself liquidated a portion of its funds— from 24,291 ETH sold for approximately $74.5 million in December 2025 at an average price of around $3,069 per token —to pay off high-interest debt and fund a stock buyback. The highest ETH holdings ever exceeded 100,000 ETH; the current balance is approximately 69,800 ETH after the sale.

ETHZilla shares have plummeted from their peaks after Thiel entered the market to around $3.33–$3.62 in recent sessions (down more than 5% before the market open due to news of the withdrawal), reflecting a drop of over 95% since its August peak — far exceeding ETH's approximately 60% drop from its 2025 peak.

Divesting from venture capital funds is important.

Venture capital firms like Founders Fund often enter early with high-risk, but confident, investments. The divestment doesn't necessarily imply a negative long-term view of Ethereum. It could reflect: portfolio rebalancing, liquidity realization, risk reduction in the context of macroeconomic volatility, or shifting capital to other opportunities.

However, given Thiel's historical influence in the field of technology and cryptocurrency investment, this image carries considerable weight.

Cryptocurrency treasury management strategies are facing increasing scrutiny as digital asset prices experience significant volatility. Public and private companies holding large amounts of ETH or BTC reserves have reported substantial unrealized losses during downturns, raising investor concerns about capital management discipline.

Our review

Investors' reactions will depend on the scale and timing of the divestment. If the sale is orderly and gradual, the impact on the market may be limited. However, a sudden divestment can affect market sentiment, especially if interpreted as an internal repositioning.

Reports that Peter Thiel and Founders Fund have divested from an Ethereum treasury management company illustrate the dynamic nature of venture capital investment strategies in the cryptocurrency sector. While this move may reflect portfolio management rather than a shift in belief about Ethereum's long-term prospects, it reinforces the importance of capital discipline in volatile markets.

As digital assets mature, the distinction between infrastructure investments and balance sheet risk will continue to shape how savvy investors deploy capital.

Disclaimer: The information presented in this article is the author's personal opinion in the field of cryptocurrency. This is not financial or investment advice. All investment decisions should be based on careful consideration of your personal portfolio and risk tolerance. The views expressed in this article do not represent the official stance of the platform. We recommend that readers conduct their own research and consult with experts before making any investment decisions.

Compiled and analyzed by HCCVenture

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