Peter Thiel-backed ETHZilla sells $74.5 million of ETH to pay debt as it shifts away from DAT strategy

The Block

Less than six months after pivoting to an Ethereum-based digital asset treasury (DAT), the Peter Thiel-backed ETHZilla says it is refocusing on a real-world asset tokenization strategy after selling $74.5 million in ether to pay off debt.

"As part of redeeming our outstanding senior secured convertible notes, ETHZilla sold 24,291 ETH," the firm said Monday. "We plan to use all, or a significant portion, of the proceeds to fund the redemption."

The company, once known as the Nasdaq-listed biotech firm 180 Life Sciences, said it now holds 69,802 ETH worth about $207 million. This is not the first time ETHZilla has unloaded ether. In October, ETHZilla sold $40 million worth of ETH as part of a $250 million stock repurchase plan.

All the above followed 180 Life Sciences entering into a $425 million PIPE agreement in July with over 60 investors as it adopted a DAT strategy.

The pivot came amid a boom in smaller-cap Nasdaq companies shifting to a strategy of accumulating crypto in the hopes of replicating the success of the Bitcoin-based DAT Strategy, chaired by Michael Saylor.

ETHZilla appears to be formally stepping away from its core strategy of stockpiling ETH. "In the future, the company believes its value will be driven by revenue and cash flow growth from our RWA tokenization business," ETHZilla said.

Earlier this month, ETHZilla said it was pursuing an RWA strategy that involves tokenizing assets such as auto loans, manufactured home loans, aerospace equipment and real estate.

ETHZilla also said Monday it would remove some of the transparency that investors interested in its DAT strategy may have grown accustomed to. "We are discontinuing the mNAV dashboard on our website effective today, but intend to continue providing periodic balance sheet updates," the company said.

Multiple of Net Asset Value, or mNAV, shows how a company’s market capitalization compares to the net assets, or in this case, the crypto it owns.

ETHZilla's shares soared over 90% in August when news broke that tech billionaire Peter Thiel had invested in the DAT. The firm's shares were down nearly 4% to $6.64 per share, according to Yahoo Finance.

Ethereum, currently trading at around $3,000, has declined by nearly 30% over the past three months.

Ethereum (ETH) price chart. Source: The Block/TradingView

Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

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Peter Thiel-backed ETHZilla sells $74.5 million of ETH to pay debt as it shifts away from DAT strategy

Divulgación de riesgos