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Peter Thiel’s Founders Fund has gone from holding roughly 7.5% of ETHZilla to zero, according to SEC filings showing the venture firm fully liquidated its stake by the end of 2025 — a swift reversal that reflects growing institutional skepticism toward crypto treasury companies.
The filing confirms that Founders Fund no longer holds any equity in the Palm Beach–based firm, just months after Founders Fund controlled roughly 7.5% of the company as recently as August. The rapid reversal underscores a sharp shift in institutional sentiment toward businesses whose primary model is stockpiling digital tokens rather than generating operating revenue.
The swift retreat underscores how Founders Fund and other venture players are reassessing exposure to niche crypto treasury vehicles. These firms gained traction during bullish market cycles by emulating the balance-sheet strategy popularized by Michael Saylor at Strategy (MSTR), which famously converted large portions of corporate reserves into cryptocurrency holdings.
Analysts say Founders Fund’s timing suggests a calculated exit rather than a panic move. “Speculative cycles tend to reward early positioning and punish late conviction,” said Mike McGlone, senior macro strategist at Bloomberg Intelligence. “When liquidity tightens, capital rotates out of high-beta themes first.” His view aligns with broader market data showing cooling enthusiasm for single-asset treasury plays.
ETHZilla, once a little-known public company called 180 Life Sciences, reinvented itself after abandoning its original pharmaceutical ambitions. The rebrand transformed it into a corporate vehicle dedicated largely to accumulating Ethereum. At its peak, the company reportedly amassed more than 100,000 ETH tokens, positioning itself as a leveraged proxy for ether price exposure.
Market watchers note Founders Fund originally invested during that strategic pivot, when speculative appetite for crypto-linked equities was surging. The narrative was simple: if token prices rose, equity holders would gain amplified upside through treasury appreciation. But such structures also magnify downside risk when markets soften, making them highly sensitive to volatility.
By early October, Founders Fund appears to have started reducing exposure as digital-asset prices approached local highs. Corporate disclosures indicate the firm sold roughly $40 million worth of ether to fund share buybacks, a move often used to stabilize stock prices. Weeks later, an additional $74.5 million in token sales went toward paying down debt tied to convertible notes.
Filings imply Founders Fund had fully liquidated its position by year-end. The timing coincided with broader market consolidation and growing scrutiny of crypto-centric public companies. For institutional investors, liquidity, balance-sheet resilience, and regulatory clarity have become decisive screening criteria.
The decision by Founders Fund may signal a broader recalibration across venture portfolios that loaded up on crypto-linked equities during the last bull cycle. While tokenization and blockchain infrastructure remain long-term themes, analysts increasingly distinguish between firms building technology and those primarily holding volatile assets.
Saylor himself has long defended the treasury-conversion model, arguing that scarce digital assets can outperform cash. “Bitcoin is engineered to outperform traditional stores of value,” he said in a widely cited conference address, underscoring why some corporations still pursue that strategy. Yet the ETHZilla episode illustrates that not all investors share equal tolerance for drawdowns.
