In a surprising twist in the investment world, Founders Fund has fully divested from ETHZilla, marking a pivotal moment as Peter Thiel backs away from a significant digital asset-related stake. Documents filed with the US Securities and Exchange Commission have confirmed that by early 2026, Founders Fund no longer maintains any investment in ETHZilla, ending its substantial 7.5% shareholding. This exit marks a shift in Thiel’s strategy concerning digital assets.
Why the Sudden Shift?
The timing of Founders Fund’s withdrawal coincided with a period of rapid growth for ETHZilla in mid-2025. Notably, the firm had contributed to a hefty $581 million funding round, underlining ETHZilla’s evolution. This company, previously rooted in biotech, underwent a major transition to Ethereum treasury operations, signaling a strategic pivot towards digital asset management.
What Impact Did the Share Sale Have?
By September 2025, Founders Fund had reduced its ownership in ETHZilla to 5.6%, and the final divestment by January 2026 left the fund with zero shares. The announcement of these sales caused ETHZilla’s stock to drop 3% during after-hours trading. Throughout the year, there’s been a 28% decline in the stock, exposing deeper concerns about the company’s long-term viability.
Nonetheless, ETHZilla holds approximately 82,186 ETH, valued at around $349 million, and retains a cash reserve of $238 million. These substantial reserves highlight its crucial role in corporate treasuries despite significant shareholder departures.
Can New Innovations Sustain Growth?
Despite the departure of Thiel and Founders Fund, ETHZilla is committed to advancements within digital assets and Web3 technologies. The recent launch of the Eurus Aero Token I, which opens the airplane engine leasing market to users through digital tokens, exemplifies this drive. Further plans involve exploring real-world asset tokenization, targeting automotive loans and commercial real estate.
In parallel, significant discussions are gaining traction within the Ethereum community, driven by insights from co-founder Vitalik Buterin. He reinforced the platform’s open, permissionless design, permitting unrestricted participation in Ethereum’s ecosystem.
Vitalik Buterin emphasized that Ethereum operates without needing authorization from him or any governing organization, underlining its decentralized and censorship-proof framework.
Strategically, ETHZilla continues leveraging blockchain innovation for integrating asset management into traditional sectors. The company’s large Ethereum reserves sustain its standing in the institutional market. As Founders Fund steps away, ongoing attention revolves around ETHZilla’s next strategic initiatives and prospective partnerships.
