Once a prominent player in the corporate crypto scene, ETHZilla soared to prominence by staking its future on a massive Ethereum treasury model. Backed by billionaire Peter Thiel's significant investment, the company's stock experienced an astronomical rise. However, this seemingly unstoppable trajectory has dramatically reversed, signaling a profound shift in both ETHZilla's strategic direction and the broader corporate approach to cryptocurrency holdings.
From Crypto King to Aerospace Aspirant
The summer of 2025 saw ETHZilla capture headlines, its strategy of holding vast amounts of Ethereum attracting a 7.5% stake from Peter Thiel's Founders Fund, which propelled its stock to a nearly 200% surge. Yet, recent SEC filings reveal a quiet, complete divestment by Thiel by late 2025, mirroring an astounding 97% decline from the stock's peak. This dramatic exit coincided with ETHZilla's own strategic pivot: the company is now abandoning its Ethereum Treasury model entirely, liquidating its crypto reserves to reduce debt and venture into commercial aerospace engines, marking a fundamental reorientation of its core business.
The Perils of Volatility and a Strategic Reassessment
ETHZilla's shift underscores the formidable challenges faced by its Ethereum-centric treasury model. While some companies found success with Bitcoin-focused strategies, ETHZilla's attempt to replicate this with Ethereum faltered under intense market volatility and sustained price pressure. The period between mid-January and mid-February 2026 saw Ethereum's price plunge from $3,400 to $1,900, creating an unsustainable environment for companies heavily reliant on its stability. This financial instability, highlighted by the sale of $74.5 million worth of ETH to fund its new aerospace venture, forced ETHZilla to concede that its original crypto-holding strategy was no longer viable.
A Nuanced View of Institutional Crypto Engagement
Despite ETHZilla's struggles, its withdrawal does not signify a universal retreat from Ethereum by institutional players. In fact, other major entities are making different moves. Bitmine Immersion Technologies continues to hold a substantial 4.37 million ETH, while the Harvard Management Company recently diversified its crypto portfolio by adding $86.8 million in Ethereum exposure through a BlackRock fund. These contrasting actions suggest a more nuanced landscape: rather than outright abandonment, some institutions are strategically rotating into Ethereum, viewing current market weakness as an opportunity for accumulation, thereby signaling ongoing, albeit more selective, confidence in the asset's long-term potential.
