Peter Thiel’s Founders Fund Sells Entire Stake in ETHZilla as Firm Shifts from ETH Hoarding to RWA Tokenization
Founders Fund, led by Peter Thiel, has fully divested its stake in ETHZilla, according to a Schedule 13G/A filed Feb. 17, 2026 showing zero common shares held as of Dec. 31, 2025. The fund had held roughly 7.5% of ETHZilla in August 2025, a stake that had briefly lent credibility to ETHZilla’s strategy of accumulating ETH as a treasury asset. ETHZilla — formerly biotech firm 180 Life Sciences — once amassed over 100,000 ETH and saw its stock peak near $107 during the 2024 crypto boom. The company sold about $40 million of ETH in October and $74.5 million in December to service convertible debt, contributing to a collapse in investor confidence and a stock decline to $4.99 by Dec. 30, 2025. In early 2026 ETHZilla announced a strategic pivot and spin‑off, ETHZilla Aerospace, refocusing on tokenizing real‑world assets (RWA) such as revenue rights from leased aircraft engines. Thiel’s exit coincides with that pivot and raises questions about timing — whether Founders Fund front‑ran the strategy change or exited after institutional appetite for ETH‑treasury models waned. Market implications for traders: large insider or institutional exits from tokenized, ETF‑like vehicles can signal lower institutional demand, increase selling pressure on related equities and secondary token markets, and raise volatility for ETH and microcap tokens tied to ETHZilla’s pivot. Traders should monitor SEC filings, changes to share float, ETH price action, and further RWA tokenization announcements from ETHZilla.
Bearish
Founders Fund’s complete exit from ETHZilla, combined with the company’s emergency ETH sales to service debt and a strategic pivot away from ETH accumulation, is likely to be bearish for ETH in the near term. Large institutional sell-offs and the loss of a high‑profile backer reduce perceived institutional demand for ETH‑treasury models and tokenized ETF‑like vehicles. The direct effects include potential downward pressure on ETH price if more holders follow suit or if ETHZilla sells additional reserves, and increased volatility for microcap tokens tied to ETHZilla’s assets. Short‑term traders may see heightened sell-side pressure and spikes in volatility around announcements or SEC filings. Over the medium to long term, the impact may soften: ETH’s fundamental demand is broad and not solely tied to one issuer, and ETHZilla’s pivot to RWA could limit future ETH sales if the company rebalances holdings toward tokenized real assets. However, the immediate market reaction to a prominent institutional exit and forced asset disposals typically skews negative.