Ethereum News Today: ETHzilla's Wall Street Pivot Sparks DeFi Identity Crisis

ETHzilla Corporation (Nasdaq: ETHZ) has sparked significant debate in the crypto and finance sectors after selling $40 million in Ethereum (ETH) to fund a share buyback program, a move that underscores the company's increasingly traditional financial strategies amid a broader reckoning in the crypto-treasury stock space, according to a Bitcoin.com report. The decentralized finance (DeFi) firm, which rebranded from 180 Life Sciences earlier this year, has repurchased approximately 600,000 shares for $12 million since Oct. 24, leveraging its $400 million ETH reserve to reduce its stock discount to net asset value (NAV), according to a GuruFocus report. CEO McAndrew Rudisill emphasized that the buybacks aim to "immediately accrete" NAV per share while curbing stock loan and borrow activity, a strategy that has driven ETHZ shares up 32% this week, the Bitcoin.com report added.

The decision to liquidate ETH follows a contentious 1-for-10 reverse stock split on Oct. 20 and the appointment of John D. Kristoff as Senior Vice President of Corporate Communications and Investor Relations, noted in a SimplyWall report. Kristoff's role, combined with the structural changes, signals ETHZilla's pivot toward Wall Street-style investor engagement, a shift critics argue dilutes its original DeFi ethos. Social media traders mocked the move, with one quipping, "ETHZILLA goes full Wall Street. Decentralized ... kinda," highlighting the irony of a crypto-focused company prioritizing stock liquidity over blockchain innovation, as the Bitcoin.com report observed.

ETHZilla's actions come as the broader crypto-treasury stock model faces scrutiny. Once a darling of 2025, the strategy—where companies like MicroStrategy and ETHZilla load up on crypto assets—now teeters amid plunging token prices and overvalued equities. Over 25% of public companies with crypto treasuries now trade at market caps below their digital-asset holdings, creating a "death spiral" risk as firms may be forced to sell assets to cover costs, according to Barron's analysis. ETHZilla's $40 million ETH sale, while a departure from the "hold forever" ethos of crypto bulls, aligns with this precarious reality.

The company's financials remain a mixed bag. Despite $400 million in ETH holdings, ETHZilla reported no revenue in the latest quarter and a negative EPS of -150.7, reflecting its pre-revenue status, the GuruFocus piece noted. Its $250 million buyback program, funded by asset sales, has yet to translate into profitability but has bolstered short-term liquidity. The firm also announced a partnership with Liquidity.io, investing $15 million for a 15% stake in the digital asset platform to expand securitization of real-world assets—a nod to its DeFi ambitions, according to Benzinga.

Analysts remain divided on ETHZilla's prospects. While the company touts its role as a bridge between traditional finance and DeFi, its stock's volatility—up 17.38% on Oct. 24—reflects lingering skepticism about its ability to monetize its blockchain infrastructure, the SimplyWall report observed. With crypto prices still below peak levels and regulatory uncertainty looming, ETHZilla's balancing act between crypto treasury management and stock market strategy will be closely watched as a bellwether for the sector's survival.