Palantir’s Peter Thiel Dumps ETHZilla as Company Abandons Ethereum Treasury Model

According to the latest filings with the U.S. Securities and Exchange Commission, Thiel now reports owning zero shares. Just six months earlier, he had disclosed a 7.5% stake, positioning himself as one of the company’s most prominent backers.

The exit triggered fresh selling pressure, with ETHZilla shares dropping more than 5% in overnight trading. The stock has already plunged roughly 97% from its 2025 peak, reflecting a dramatic loss of investor confidence.

From Ethereum Treasury to Asset Tokenization

ETHZilla – formerly known as 180 Life Sciences – rebranded in 2025 and attempted to mirror the Bitcoin balance sheet strategy popularized by MicroStrategy, but with Ethereum instead. The approach quickly ran into trouble as crypto markets weakened.

Falling ETH prices forced the company to liquidate significant portions of its holdings. In December 2025 alone, it sold about $74.5 million worth of Ethereum to repay senior secured convertible notes and stabilize its balance sheet.

Today, ETHZilla reportedly holds around 69,800 ETH, valued near $139 million. However, its financial health remains fragile, with an Altman Z-Score of -0.54 signaling elevated bankruptcy risk.

A Radical Pivot: Jet Engines on Blockchain

In a dramatic shift, the company has abandoned its “Digital Asset Treasury” narrative and repositioned itself as a real-world asset tokenization platform.

Through its new unit, ETHZilla Aerospace LLC, the firm launched Eurus Aero Token I – a product allowing investors to buy fractional exposure to two CFM56 jet engines acquired for $12.2 million.

Each token is priced at $100, with a minimum investment of $1,000. The offering promises projected annual returns of around 11% through 2028, generated from lease payments by a major U.S. airline. The tokens are issued on Arbitrum and distributed via Liquidity.io, backed by collateral including the engines themselves, lease receivables, and insurance proceeds.

Competing in the RWA Yield Race

ETHZilla’s projected 11% yield places it above products offered by Ondo Finance, which typically generate around 3%-5% from Treasury-based strategies, and closer to the 8%-12% range seen on Centrifuge private credit deals.

Unlike Ondo’s focus on tokenized U.S. Treasuries, ETHZilla is betting on physical infrastructure – jet engines and potentially other machinery – to attract yield-seeking investors.

What Thiel’s Exit Signals

Despite abandoning ETHZilla, Thiel’s crypto exposure remains intact. Founders Fund continues to hold significant direct positions in Bitcoin and Ethereum, having invested roughly $200 million across the two assets in 2023-2024.

Market analysts interpret the move as a broader shift: away from publicly traded “crypto proxy” companies that mirror token prices, and toward either direct token ownership or structured real-world asset applications.

Meanwhile, ETHZilla plans to expand tokenization into manufactured home loans, auto financing, and heavy industrial equipment in 2026 – an ambitious roadmap that will test whether its new strategy can succeed where its Ethereum treasury experiment failed.

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