One of the five largest Ethereum treasury companies has sold a large part of its ETH holdings. This has started a new discussion about whether institutional actors are becoming negative towards Ethereum, or just managing the company's risks.
ETHZilla stated that they sold 24 291 ETH for approximately 74.5 million USD. This occurred as an early repayment of their senior secured convertible notes.
ETHZilla sells Ethereum to pay off its debt
The company will use all, or a large part, of the money to repay the debt. They make repayments before New Year's Eve.
Simply put, ETHZilla sold Ether to pay back loans, not because they believe Ethereum's price will drop. Senior secured convertible notes have high priority in repayment and often require payment in cash.
Selling liquid assets like ETH is a common way to resolve such debts.
The company also stated that it is discontinuing its mNAV dashboard, which previously displayed their Ethereum holdings and net worth.
ETHZilla says that the valuation in the future should focus on revenue and cash flow from their real-world asset (RWA) tokenization business, not just their crypto treasury.
This shows a strategy, not that they have given up. ETHZilla is shifting from a crypto-treasury-focused company to a business that invests in RWA tokenization.
Ethereum remains in their balance sheet but is no longer the company's most important asset.
For the market, the sale is a one-time event linked to debt repayment. It does not show that institutions are leaving Ethereum.
Despite this, the company's stock price has fallen significantly after today's news.
ETHZilla's stock fell almost 5% after the sales announcement. Source: Google Finance
Ethereum has traded around 3,000 USD in recent days. The price rose after a low around 2,900 USD in December, following several weeks of volatile trading.
Greater uncertainty in the market, low year-end liquidity, and mixed flows from institutions meant that ETH did not move up or down much.
Against this background, sweeping treasury sales usually have little lasting effect unless they indicate a larger trend – which they have not so far.
Latest purchases and sales elsewhere
Other major events show that institutional players act differently regarding Ethereum.
Earlier in December, on-chain data showed that Arthur Hayes moved ETH worth several million USD to institutional and centralized platforms.
Many saw it as a sale, but Hayes himself says he swapped the portfolio for selected DeFi assets, not that he left Ethereum.
At the same time, BitMine Immersion Technologies, linked to Tom Lee, continued to buy ETH throughout December.
BitMines' latest purchase came on December 22 and thus increased the company's treasury during market downturns.
Overall, ETHZilla sold ETH due to debts and changes in the company, not because they believe Ethereum will go down.
Recent events show that treasury companies are rebalancing, buying selected assets, and being cautious, but we do not see large institutional sales.
