ETHZilla Dumps $74.5M in Ether to Tame Debt as Stock Plummets 96%

ETHZilla (ETHZ), a Nasdaq-listed firm created to hoard ether, sold $74.5 million of its crypto holdings to pay down debt, marking a strategic shift from accumulation to liability management. It's the company's second major sale from its treasury, signaling intense pressure as its stock price craters.

The firm sold 24,291 ETH to redeem senior secured convertible notes, according to a regulatory filing on Friday. The market reacted swiftly; ETHZ shares dropped 4% on Monday and have now collapsed roughly 96% from their August highs. This move highlights a painful reversal for so-called digital asset treasury companies.

Many public firms that raised capital to buy crypto are now trading below the net asset value (NAV) of their holdings. This discount makes it nearly impossible to raise new funds, forcing them to sell their core digital assets to manage debt or prop up their plunging stock prices.

This isn't ETHZilla's first attempt to stop the bleeding. Earlier in the fourth quarter, the company unloaded $40 million in ETH to fund share repurchases. The strategy failed to impress investors. The stock, which traded around $20 when the buyback was announced in October, has continued its slide to below $7. ETHZilla stated it may continue to sell ETH or issue equity to fund its business plans.

The corporate crypto playbook is being rewritten in real-time. The 'accumulate-at-all-costs' model is giving way to a brutal focus on liability management. For investors, a company’s crypto balance sheet is no longer a simple bullish signal; it’s now a potential source of liquidity to cover financial distress. The key question shifts from 'How much do you own?' to 'How will you survive?'