Peter Thiel's prominent venture capital firm Founders Fund has completely divested its position in ETHZilla, according to recent SEC disclosures. The move comes amid growing challenges for companies holding Ethereum as a treasury asset, marking a significant retreat from a stake that represented 7.5% ownership just months ago.
In a notable shift that underscores mounting pressure on Ethereum treasury strategies, Founders Fund—the influential venture capital firm co-founded by billionaire Peter Thiel—has eliminated its entire stake in ETHZilla, according to newly filed Securities and Exchange Commission documents.
The complete exit represents a dramatic reversal for the prominent VC firm, which disclosed a 7.5% ownership position in ETHZilla earlier in 2025. The filing shows Founders Fund entities now hold zero shares in the company, though the exact timing and rationale behind the divestment remain undisclosed.
ETHZilla, like several other publicly traded entities, has pursued a strategy of holding Ethereum as a primary treasury asset—a corporate approach that gained traction following MicroStrategy's pioneering Bitcoin treasury model. However, this strategy has faced significant headwinds in recent months as cryptocurrency market volatility has intensified and institutional appetite for alternative crypto assets has wavered.
The Founders Fund exit adds to growing concerns about the viability of Ethereum-focused treasury strategies. Unlike Bitcoin, which has seen continued institutional adoption and even ETF approval, Ethereum has faced additional challenges including network competition from layer-2 solutions and alternative smart contract platforms, as well as ongoing regulatory uncertainty regarding its classification as a security.
Peter Thiel, a long-time Bitcoin advocate and cryptocurrency proponent, has historically expressed skepticism about Ethereum and alternative cryptocurrencies. His firm's complete withdrawal from ETHZilla may signal broader institutional doubts about the sustainability of corporate Ethereum treasury holdings as a value creation strategy.
The move comes at a particularly challenging time for companies with significant cryptocurrency treasury positions. Market volatility has forced many firms to reassess the wisdom of converting cash reserves into digital assets, particularly when those holdings can significantly impact quarterly earnings and balance sheet stability.
For ETHZilla shareholders, the Founders Fund exit may raise concerns about institutional confidence in the company's strategy. Major venture capital exits often prompt other investors to reassess their positions, potentially creating downward pressure on share prices.
As the cryptocurrency market continues to mature, the divergence between Bitcoin-focused and Ethereum-focused treasury strategies appears to be widening, with institutional capital increasingly favoring the former over the latter.