ETHZilla Sells $74.5M in ETH to Shift Focus to RWA Income

ETHZilla, a Nasdaq-listed firm backed by billionaire Peter Thiel, has sold $74.5 million worth of Ethereum to pay down debt. The company, which rebranded from 180 Life Sciences earlier this year, said it sold 24,291 ETH to redeem its senior secured convertible notes according to The Block.

The move signals a strategic shift away from its digital asset treasury (DAT) model, which had been centered on accumulating Ethereum.

This marks ETHZilla's second major Ethereum sale within months. In October, the firm sold $40 million in ETH to fund a stock repurchase plan. The latest transaction comes as Ethereum's price has fallen nearly 30% over the past three months, putting pressure on ETHZilla to manage its balance sheet amid shrinking crypto valuations.

The company still holds around 69,802 ETH, valued at approximately $207 million. ETHZilla announced it is pivoting toward real-world asset (RWA) tokenization, aiming to generate revenue from assets such as auto loans, real estate, and aerospace equipment. This shift aligns with a broader trend among smaller-cap companies moving away from speculative crypto hoarding toward more traditional operating models.

A Strategic Reset Amid Declining Crypto Values

ETHZilla's pivot comes as smaller public companies face mounting challenges in maintaining crypto-based treasuries. Declining ether prices and mounting debt obligations have limited the flexibility of firms that adopted this strategy in hopes of replicating the success of Bitcoin-focused models, such as those led by Michael Saylor. For ETHZilla, the decision to sell Ethereum reflects a valuation reset, moving away from metrics tied to crypto holdings and toward revenue and cash flow from RWA tokenization.

The firm has also taken steps to reduce the transparency of its DAT strategy. It announced that it would discontinue its mNAV dashboard, which displayed the ratio of market capitalization to net asset value. While the company will continue to issue balance sheet updates, this move signals a clear departure from the crypto-centric valuation model that initially drove investor interest according to PR Newswire.

Market Reactions and Governance Developments

ETHZilla's shares were down nearly 4% to $6.64 per share following the announcement. The stock had soared over 90% in August after Peter Thiel's involvement in the DAT strategy was disclosed, but enthusiasm has since waned as market conditions have deteriorated according to FinanceFeeds. Meanwhile, the company announced the appointment of Angela Dalton and Michael Edwards to its board of directors, bringing in experienced leaders with backgrounds in technology, institutional investing, and event-driven strategies. These appointments are expected to strengthen governance and guide ETHZilla's transition toward RWA-based growth.

The company's leadership has emphasized that future value will stem from operational cash flows rather than the appreciation of Ethereum. This shift is in line with broader investor sentiment, as markets increasingly favor firms with tangible revenue streams over those relying on volatile crypto reserves according to Coinotag. ETHZilla's latest moves reflect a growing trend among public companies seeking to stabilize their balance sheets amid ongoing crypto market corrections.

What This Means for Investors

For investors, ETHZilla's transition highlights the risks and limitations of digital asset treasuries, particularly for smaller companies with limited liquidity. As the firm moves toward RWA tokenization, it will need to demonstrate progress in generating recurring revenue and attracting institutional interest. The success of this strategy will determine whether ETHZilla can regain investor confidence after months of declining stock prices and asset sales.

The broader market may also watch how other DAT firms adapt to the current crypto winter. With Ethereum prices still volatile and debt obligations pressing, companies that rely heavily on crypto reserves may face similar pressures to restructure or pivot. ETHZilla's experience serves as a cautionary example of how quickly the balance between crypto accumulation and operational viability can shift.