ETHZilla stated that it sold 24,291 ETH for $74.5 million to pay off outstanding convertible bonds amid a weakening crypto market.
This move reflects the trend of 'crypto treasury companies' actively restructuring their balance sheets as Bitcoin and altcoin prices decline, forcing many businesses to prioritize liquidity, debt, and the ability to withstand volatility.
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ETHZilla sold 24,291 ETH at an average price of $3,068.69/ETH to create a source for repaying convertible bonds.
After the transaction, the company had about 69,800 ETH on its balance sheet.
The market downturn has forced many treasury companies to sell assets or raise capital to strengthen their finances.
ETHZilla sold ETH to repay convertible bonds
ETHZilla sold part of its Ether holdings to redeem secured convertible bonds, prioritizing reducing debt risk during periods of crypto price volatility.
According to the SEC filing, the company sold 24,291 Ether for a total value of $74.5 million, at an average price of $3,068.69 per ETH. After the transaction, ETHZilla had about 69,800 ETH on its balance sheet as of Friday.
The company indicated that it plans to use all or most of the proceeds to redeem outstanding secured convertible bonds to alleviate debt obligation pressure as the market declines.
Rebranded from biotech to 'Ether treasury' strategy
ETHZilla repositioned from a biotechnology company to an Ether accumulation model as a strategic asset, betting on long-term demand for ETH.
The company changed its name from 180 Life Sciences Corp on 7/29, exiting the biotechnology sector to shift to an investment strategy focused on Ether. Previously, this clinical-stage biotech company saw its stock drop more than 99.9% since going public in 2020.
The information about selling ETH emerged after ETHZilla announced two buyback deals in December, including acquiring a 20% stake (fully diluted) in the AI automotive finance startup Karus and a 15% stake in the digital home lending platform Zippy.
ETHZilla's stock sharply declined along with the weakening market
ETHZilla's stock price continues to be under pressure as the crypto market declines, reflecting concerns about financial health and treasury strategy.
According to data from Google Finance, the company's stock closed down 8.7% on Monday and has fallen over 65% year-to-date.
Digital asset treasury restructures as prices drop
When Bitcoin and altcoins weaken, treasury companies often sell assets or raise capital to increase cash reserves, pay off debts, and stabilize their balance sheets.
Cointelegraph reported in September that listed companies had significantly increased their exposure to Bitcoin this year. Data from BitcoinTreasuries.NET shows that over 190 listed companies hold Bitcoin, with total holdings exceeding 5% of Bitcoin's circulating supply in September.
With Ether, demand for 'treasury' strategies is also increasing. According to CoinGecko data, 27 public companies hold a total of about 6 million ETH, equivalent to about 5% of the circulating supply of the token.
In the context of Bitcoin retreating from its all-time high of $126,000 on 10/6 and the weak trend spilling over to altcoins like Ether, some treasury companies have sold assets to reinforce their finances. At the end of October, FG Nexus began selling coins to fund a share buyback program, liquidating 10,922 ETH and combining a separate debt withdrawal to accelerate the buyback.
In November, Sequans Communications announced that it had bought back 50% of its outstanding convertible debt thanks to proceeds from selling 970 Bitcoin. The transaction helped reduce total debt to $94.5 million and lower Bitcoin holdings to 2,264 BTC, down from 3,234 BTC previously.
Meanwhile, Strategy—the first public company to adopt a Bitcoin treasury strategy—reported selling 4,535 million Class A common shares during the period from 12/15 to 12/21, raising $747.8 million to bolster cash reserves as the crypto market declined.
Frequently Asked Questions
How much ETH has ETHZilla sold and how much money did it raise?
The company sold 24,291 ETH and raised $74.5 million, with an average price of $3,068.69 for each ETH.
After the sale, how much ETH does ETHZilla still hold?
According to the disclosed records, the company had about 69,800 ETH on its balance sheet as of Friday.
What does ETHZilla do with the money from selling ETH?
ETHZilla plans to use all or most of the proceeds to repurchase outstanding secured convertible bonds.
Why can treasury companies sell assets during a market downturn?
When crypto prices weaken, they often prioritize liquidity and reduce debt risk, so they may sell coins to pay off debts, bolster cash reserves, or support programs such as buybacks.
Source: https://tintucbitcoin.com/ethzilla-tiet-lo-ban-ether-745-trieu-usd-tra-no/
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