ETHZilla Liquidates $74.5M in Ether to Repay Convertible Debt

Crypto treasury firm ETHZilla has announced that it sold a portion of its Ether holdings to settle outstanding convertible notes amid a market downturn. This move was disclosed in a filing with the U.S. Securities and Exchange Commission.

Key Takeaways

ETHZilla sold 24,291 Ether for $74.5 million at an average price of $3,068.69 per token.
The company plans to use the proceeds from the sale to redeem its outstanding senior secured convertible notes.
ETHZilla rebranded from 180 Life Sciences Corp on July 29 and has significantly shifted its focus toward Ether investments.
Following this development, ETHZilla's stock fell 8.7% on Monday and has decreased over 65% year-to-date.
The liquidation of assets by ETHZilla reflects a broader trend among digital asset treasuries as market prices decline.

ETHZilla reported the sale of 24,291 Ether, generating $74.5 million at an average price of $3,068.69 per token. As of Friday, the company still holds approximately 69,800 ETH on its balance sheet. The proceeds from this transaction are expected to cover a significant portion of its outstanding senior secured convertible notes.

Earlier this year, ETHZilla underwent a rebranding from 180 Life Sciences Corp on July 29. This transition marked a pivot from biotechnology towards investments in Ether, an area where it hopes to achieve better success. Prior to rebranding, the former biotech company saw its stock plummet over 99.9% since its public listing in 2020.

This announcement follows ETHZilla's recent acquisition activities in December, where it secured a 20% fully diluted stake in the automotive-finance AI company Karus and a 15% stake in digital housing lender Zippy. After the news, ETHZilla's stock experienced an 8.7% decline during Monday’s trading session and has decreased more than 65% over the year, according to data from Google Finance.

Source: Google Finance

ETHZilla liquidates $74.5M in Ether to redeem convertible debt

Trend of Digital Asset Liquidation as Market Prices Decline

In September, Cointelegraph highlighted that publicly traded companies are increasing their Bitcoin exposure significantly. According to data from BitcoinTreasuries.NET, over 190 listed companies now hold Bitcoin, accounting for more than 5% of its circulating supply.

Ether has also seen a similar rise in demand, with 27 public companies collectively holding around 6 million ETH, equating to about 5% of the token’s circulating supply, based on CoinGecko data.

Ether Treasury Holdings. Source: CoinGecko

As Bitcoin's price fell from its peak of $126,000 on October 6, and other altcoins like Ether also faced weakness, many digital asset treasury companies have opted to liquidate assets to shore up their balance sheets. For instance, FG Nexus began selling its Ether to back its share repurchase plan, liquidating 10,922 ETH to help fund the buyback of approximately 3.4 million shares at an average price of $3.45 each.

In November, Sequans Communications redeemed 50% of its outstanding convertible debt by selling 970 Bitcoin, which brought down its total debt to $94.5 million and reduced its Bitcoin holdings from 3,234 BTC to 2,264 BTC.

Lastly, Strategy, the first public company to implement a Bitcoin treasury strategy, announced its sale of 4.535 million shares of Class A stock between December 15 and December 21. This move raised $747.8 million to bolster its cash reserves amidst the ongoing crypto market downturn.

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