Staking Products Launch Despite Treasury Failures

Staking Products Launch Despite Treasury Failures

ETHZilla Corp stock collapsed to $3.6, down ~95-97% from its August 2025 peak above $40K while Peter Thiel’s Founders Fund fully exited its position according to recent SEC filings. When ETH briefly touched $4,000 in 2021, ETHZilla’s equity multiple expanded dramatically. The subsequent 50% ETH drawdown triggered a near-complete equity wipeout.

The ETHZilla collapse raises questions about other corporate ETH treasury strategies, although Tom Lee’s Bitmine continues accumulating ETH through its own approach, undeterred by price action. However, whether Bitmine or other treasury vehicles can withstand further downside moves remains unproven. As ETHZilla held ETH on its balance sheet without operational revenue or diversified cash flows, the equity wrapper created an asymmetric downside where the stock declined far more than the underlying ETH, as market confidence evaporated alongside price deterioration.

Current data shows that leveraged, pure-play treasury companies fail during prolonged 50% drawdowns. The open question is whether having diversified operations, revenue streams, or different capital structures actually protects equity valuations during prolonged crypto drawdowns, or if any pure-play treasury vehicle faces similar valuation compression.