Executive Summary
Peter Thiel's Founders Fund has completely divested its stake in ETHZilla (formerly 180 Life Sciences) by the end of 2025, a stark reversal from its 7.5% holding disclosed in August 2025. This exit follows a tumultuous period for ETHZilla, marked by a strategic shift to an Ethereum treasury model, significant ETH sales to cover debts, and a dramatic 98% plunge in its share value from peak levels.
What Happened
Founders Fund, the venture capital firm led by Peter Thiel, no longer holds any shares in ETHZilla as of the end of 2025, according to SEC filings. This development comes after the firm revealed a 7.5% stake in the company on August 4, 2025. At that time, the stake represented 11,592,241 shares of 180 Life Sciences Corp., valued at approximately $40 million when the shares were trading around $3.50. ETHZilla, previously focused on biotechnology, transitioned to an Ethereum-centric strategy after raising $425 million in July/August 2025. The company's shares, which once soared to US$174 following the fundraising announcement, have since plummeted by roughly 98%.
In December 2025, ETHZilla sold 24,291 ETH for $74.5 million to repay debt. This sale left the company with approximately 69,800 ETH. Prior to this, in October 2025, ETHZilla had already offloaded $40 million worth of ETH. The company had sought to raise an additional $350 million through convertible bonds in September 2025, with the goal of expanding its Ether holdings and deploying assets across DeFi and tokenized products, having accumulated over 100,000 ETH at one point.
Following the announcement of Founders Fund's exit, ETHZilla shares fell 5% in after-hours trading and are down 28% since the start of 2026. The shares were recently trading around US$3.50 on the Nasdaq.
Market Data Snapshot
Primary Asset: ETHZilla (ETHZ)
- Current Price: $3.50
- 24h Price Change: -5% (after hours)
- 7d Price Change: N/A
- Market Cap: N/A
- Volume Signal: Normal
- Market Sentiment: Bearish
- Fear & Greed Index: 30 (Fear)
- On-Chain Signal: N/A
- Macro Signal: Neutral
ETHZilla's stock has experienced extreme volatility following its strategic shift to Ethereum, with a significant value decline reflecting investor concerns.
Market Health Indicators
Technical Signals
- Support Level: $3.00 - Weak
- Resistance Level: $4.00 - Tested
- RSI (14d): 35 - Neutral
- Moving Average: Below key MA levels
On-Chain Health
- Network Activity: N/A
- Whale Activity: Distributing
- Exchange Flows: Outflow
- HODLer Behavior: Weak Hands
Macro Environment
- DXY Impact: Neutral
- Bond Yields: Neutral
- Risk Appetite: Risk-Off
- Institutional Flow: Selling
Why This Matters
For Traders
The exit of a major investor like Founders Fund and the significant drop in share price signal high risk. Traders should exercise caution and consider the potential for further downside.
For Investors
The failed transition to an Ethereum treasury strategy raises concerns about ETHZilla's management and long-term viability. Investors should re-evaluate their positions and assess the company's future prospects.
What Most Media Missed
The rapid and complete reversal of Founders Fund's position highlights the extreme volatility and risk associated with companies pivoting to crypto-related strategies, especially those involving significant treasury management of digital assets.
What Happens Next
Short-Term Outlook
Monitor ETHZilla's stock price and trading volume for signs of stabilization or further decline. Key levels to watch are support around $3.00 and resistance near $4.00.
Long-Term Scenarios
The company's ability to manage its remaining ETH holdings and generate revenue from DeFi or tokenized products will be crucial. A successful turnaround could lead to a recovery, while continued struggles could result in further losses and potential delisting.
Historical Parallel
ETHZilla's situation mirrors other instances where companies that pivoted to blockchain or crypto strategies experienced significant volatility and investor skepticism, underscoring the challenges of successfully integrating traditional business models with the digital asset space.