ETHZilla’s 97% Crash: Thiel Bails as Crypto Dreams Fade!

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In the summer of 2025, ETHZilla was the talk of the town, or at least the talk of the crypto bros who thought “holding ETH” was a business plan. It was like a medieval knight wearing a tuxedo-confusing but oddly impressive.

With a 7.5% stake from billionaire investor Peter Thiel, the stock attracted considerable attention. But that story has now changed-probably because the stock was more volatile than a drunken parrot on a trampoline.

Recent SEC filings show that by the end of 2025, Thiel and his Founders Fund had quietly sold their entire stake, which is about as subtle as a dragon in a teacup. Now they’re down to zero, which is a number that makes even the most optimistic accountant weep.

This marks a dramatic shift. At one point, the stock had surged nearly 200% just on news of Thiel’s involvement. Since then, it has fallen about 97% from its peak. A journey that would make even the most seasoned crypto trader question their life choices.

ETHZilla stock price action

The bigger issue is that ETHZilla itself is changing direction. As of the 18th of February, with the stock trading around $3.51, the company has moved away from its Ethereum Treasury model. Because nothing says “financial stability” like building rockets with your cryptocurrency savings.

Instead of focusing on holding ETH, it is now selling its crypto reserves to reduce debt and invest in commercial aerospace engines. A move so bold, it’s like buying a lottery ticket and then immediately burning it for warmth.

That said, Peter Thiel’s exit came at a time when the crypto-treasury strategy was facing serious pressure. It’s like trying to balance a stack of pancakes on a unicycle-possible, but unlikely to end well.

While companies like Michael Saylor’s Strategy found success holding Bitcoin, ETHZilla’s attempt to copy that model with Ethereum did not go as planned. It’s like trying to replicate a successful recipe by using a different brand of salt-no one’s sure what went wrong, but the results are… questionable.

Market conditions and price volatility made the strategy much harder to sustain. It’s like trying to play chess in a tornado-everything’s in motion, and the rules don’t matter anymore.

How is ETH reacting?

The Ethereum OI-weighted funding rate chart from mid-January to mid-February 2026 shows heavy volatility followed by a period of weakness. It’s like watching a soap opera where the main character keeps getting hit by a bus.

Between mid-January and mid-February 2026, Ethereum fell sharply from around $3,400 to near $1,900. A drop so steep, it could make a mountain look like a pebble.

During this drop, many traders kept buying the dip using borrowed money, which increased risk and helped push prices lower. Because nothing says “smart investing” like borrowing money from a dragon to buy a banana.

The large red spikes in early February show major liquidations, when too many traders were forced out near $1,900. These moments often mark short-term bottoms, as weak positions are cleared. Like a bad party where only the most determined guests remain.

By mid-February, trading activity slowed. ETH moved sideways near $2,100, and funding dropped, showing low confidence and weak demand. It’s like a party where everyone’s too polite to leave, but no one’s having fun.

Since funding mainly reflects Futures trading, it does not fully show spot market selling, making it an incomplete signal. Like trying to read a book in a language you only half-understand.

For ETHZilla, which once held over 82,000 ETH, this volatility was not just market noise, it threatened the company’s financial stability. A situation so dire, it’s like being stuck in a car with a GPS that keeps saying “You are here” when you’re clearly in a different country.

With its stock down 30% in a month and Ethereum struggling, ETHZilla decided to change direction. The company sold about $74.5 million worth of ETH, not to buy more crypto, but to launch ETHZilla Aerospace. A move so bold, it’s like betting your life savings on a magic trick performed by a cat.

Not everyone is quitting

This comes at a time when Bitmine Immersion Technologies now holds about 4.37 million ETH, equal to nearly 3.6% of all circulating supply. It’s like a pirate hoarding treasure in a world where everyone else has moved on to cryptocurrency.

Additionally, the Harvard Management Company recently reduced some of its Bitcoin ETF exposure and added about $86.8 million in Ethereum through a fund by BlackRock. Because nothing says “financial wisdom” like diversifying into a market that’s as stable as a house of cards in a hurricane.

This shows that major institutions do not see current market weakness as a reason to leave. Instead, they see it as a chance to rotate into Ethereum while prices are still low. A strategy as bold as a squirrel trying to outrun a train.

Final Summary

  • ETHZilla’s collapse shows that not every crypto treasury model can survive long-term market stress. Especially not the ones that rely on the financial equivalent of a rubber chicken.
  • Peter Thiel’s exit reflects the failure of one strategy, not the end of institutional interest in Ethereum. Because even the most chaotic markets have their fans, like a toddler at a circus.

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2026-02-19 10:15