Ethereum News Today: ETHZilla Sells $74M in ETH to Fund RWA Pivot Amid Dwindling NAV Backlash

ETHZilla (ETH) has sold 24,291 ETH worth approximately $74.5 million to redeem outstanding senior secured convertible notes according to a report. The move follows a broader strategy shift away from the company's original digital asset treasury (DAT) model toward a focus on real-world asset (RWA) tokenization as detailed in the same report.

ETHZilla now holds 69,802 ETH, with a market cap-to-net assets value (mNAV) ratio of 0.70 and a NAV/share of $12.54 according to Bloomberg.

The company has removed its mNAV dashboard from its website, signaling a reduced emphasis on the metric that previously highlighted how its market cap compared to its net asset value as reported by CoinDesk. ETHZilla's shift comes as it seeks to generate value through revenue and cash flow from its RWA tokenization initiatives, including potential ventures in auto loans, real estate, and other traditional assets according to The Block. The firm has also sold 40 million worth of ETH in October to fund a share buyback program as reported by Bitget.

Community members have responded with sharp criticism, accusing the company's management of abandoning its original strategy too soon and extracting value without accountability according to LookonChain. Some users on X have pointed out that the move may have destroyed two-thirds of the company's net asset value in just three months as noted in a TradingView article. Despite the criticism, ETHZilla claims the pivot is necessary to adapt to current market conditions and focus on sustainable growth.

A Rapid Pivot in a Downturn

ETHZilla's transition from a biotech firm to a crypto hoarder was once one of the most talked-about plays in the market according to Marketscreener. After securing a $425 million private investment in public equity (PIPE) in July, the firm rebranded from 180 Life Sciences and began acquiring large quantities of ETH. Its stock surged above $100 in August, partly due to Thiel's investment .

However, the company's stock has since plummeted by over 90%, underperforming both its net assets and the broader cryptocurrency market . The falling share price and mounting debt obligations have constrained its ability to raise capital for further ETH purchases . This has led ETHZilla to sell its tokens to cover liabilities and fund buybacks, in an attempt to narrow the growing mNAV gap.

RWA as the New Focus

The decision to pivot toward RWA tokenization reflects a broader trend among crypto-based companies struggling to justify valuations as the sector cools . ETHZilla has already taken minority stakes in tokenization startups like Zippy, Karus, and Satschel, signaling its intent to build a foundation for its new business .

In its latest announcement, the firm stated that its future value will be driven by cash flow and revenue growth from tokenized real-world assets . This marks a departure from the DAT model, where value was primarily tied to the company's ETH holdings. By removing its mNAV dashboard from the website, ETHZilla appears to be distancing itself from traditional DAT metrics and transparency expectations .

Market and Community Reaction

The community backlash has been swift and vocal. Critics argue that ETHZilla's rebrand and pivot were opportunistic, leveraging retail hype without long-term commitment . Others have criticized the company for failing to protect its net asset value and for making unforced errors that eroded investor confidence .

From a market perspective, ETHZilla's stock has been one of the most volatile in the sector. It currently trades at around $6.30, having fallen nearly 96% from its August highs . Meanwhile, Ethereum has declined by about 30% in the same period. The divergence between ETHZilla's stock and its underlying assets highlights the challenges faced by firms that rely on crypto valuations for their market price .

A Wider Sector Trend

ETHZilla is not the only company reevaluating its strategy amid the ongoing crypto downturn. Many firms that previously sought to replicate the success of Michael Saylor's MicroStrategy have found themselves struggling as stock prices and crypto prices diverge . In response, companies like BitMine have continued to accumulate ETH, while others have paused purchases and focused on managing debt .

As the market continues to stabilize-or contract-firms like ETHZilla are being forced to find new ways to generate returns and justify their business models. Whether this shift toward RWA tokenization proves successful remains to be seen, but it underscores the evolving nature of the crypto and DeFi landscape .