ETHZilla is a public company that was created to hold ether as a core treasury asset. Recently the company made another big move by selling part of its ether holdings. The goal was simple. Reduce debt and manage pressure from falling share prices.
According to a recent filing ETHZilla sold 24291 ether. The total value of this sale was about seventy four point five million dollars. The ether was sold at an average price close to three thousand dollars per coin. The money from this sale was used to redeem senior secured convertible notes that the company had issued earlier.
This was not the first time ETHZilla sold ether. In October the company sold around forty million dollars worth of ether. At that time the funds were used to buy back company shares. The idea was to support the stock price and show confidence in the business. However the share price continued to fall even after that move.
After this second sale ETHZilla still holds around sixty nine thousand eight hundred ether. The value of this remaining ether is more than two hundred million dollars at current prices. This shows that the company still has a large exposure to ether even after reducing its holdings.
The market reaction has not been positive. ETHZilla shares fell about four percent after the news. From the highs seen in August the stock is now down by about ninety six percent. This sharp drop has made it very hard for the company to raise new money without selling assets.
ETHZilla is not alone in this situation. Many digital asset treasury companies are facing similar pressure. Earlier this year these firms raised money to buy crypto and hold it on their balance sheets. The plan was to benefit from rising prices and attract investors. But when stock prices fell faster than crypto prices a problem appeared.
Many of these companies are now trading below the value of the crypto they hold. This means the market values the company less than its assets. When this happens issuing new shares becomes very difficult. Investors do not want to buy stock that is already priced below asset value.
Because of this many firms are changing strategy. Instead of buying more crypto they are focusing on managing debt. Selling part of their crypto holdings becomes a way to survive. It helps reduce interest costs and avoids default risk.
This trend shows a clear shift. What was once a race to build the biggest crypto treasury has turned into a phase of caution. Companies are learning that holding volatile assets while carrying debt can be dangerous during market downturns.
ETHZilla has said it may continue to sell ether or raise money through equity if needed. The company says it wants to keep moving forward with its business plans while staying financially stable.
This situation highlights a key lesson for the market. Crypto treasuries can offer upside in strong markets. But during weak periods risk management becomes more important than accumulation.
