Billionaire tech investor Peter Thiel and his venture capital firm, Founders Fund, have completely reduced their holdings in ETHZilla, an Ethereum-focused treasury company, according to a recent filing with the U.S. Securities and Exchange Commission (SEC).
The filing indicates that Thiel’s firm reduced its ownership to 0% by early 2026, ending a high-profile backing that once saw the firm holding a 7.5% stake in the Nasdaq-listed entity.
The exit is a reversal for the firm, which originally held its position in August 2025 as part of a $581 million capital raise to transform the former biotech company into a digital asset powerhouse.
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Peter Thiel’s Founders Fund exit Ethereum treasury firm ETHZilla.
• The question is where is the money going next? Bitcoin? 👀 pic.twitter.com/FcZnYuyT6P
— TruthTrencherX (@TruthTrencher) February 18, 2026
The founders’ exit follows initial hype
The exit was reported under the Schedule 13G passive rule, signifying that Founders Fund did not intend to influence the control or management of ETHZilla before exiting its position entirely.
This move follows a gradual reduction in holdings; SEC documents previously showed the fund had cut its stake to 5.6% by September 30, 2025. Following the news of the total exit, ETHZilla’s shares experienced a 3% decline in after-hours trading, continuing a downward trend that has seen the stock lose 28% of its value year-to-date.
When Founders Fund first disclosed its investment in August 2025, ETHZilla shares surged as investors embraced the idea of publicly traded companies acting as leveraged proxies for crypto exposure, but enthusiasm faded quickly.
By the time the exit became public, ETHZilla’s stock had fallen by more than 90% from its all-time high, making it one of the weakest-performing crypto treasury stocks during the downturn. For many investors, Thiel’s departure was interpreted as a sign that the market was reassessing highly leveraged treasury businesses.
Also Read: Etherealize Secures $40M to Boost Ethereum’s Wall Street Push as Institutions Add $1.26B in ETH
ETHZilla continues Web3 expansion despite the exit
ETHZilla did not announce a reversal following the filing; instead, the company continued presenting itself as an Ethereum treasury business, maintaining that accumulating ETH remained central to its long-term strategy despite market volatility. Several users argued that the company had become an example of the risks associated with highly leveraged crypto treasury firms rather than a reflection of Ethereum’s fundamentals.
While Peter Thiel’s exit shows a change in his personal investment strategy for 2026, ETHZilla continues to expand its footprint in the Web3 industry. The company recently introduced the Eurus Aero Token I through its subsidiary, ETHZilla Aerospace, enabling investors to engage with aircraft engine leasing through digital tokens.
Meanwhile, Vitalik Buterin recently reiterated that Ethereum is not his or any single group’s property. He stressed that using or building on Ethereum doesn’t require agreeing with his personal views on topics like DeFi, AI, or politics. Ethereum, designed to be permissionless and censorship-resistant, allows anyone to deploy applications or move funds without needing approval from him, the Ethereum Foundation or protocol developers.
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