ETHZilla, a cryptocurrency treasury firm, announced in a recent filing with U.S. regulators that it has sold a portion of its Ether (ETH) holdings to pay down convertible notes as the market undergoes turmoil. The company revealed that it sold 24,291 Ether for $74.5 million, averaging $3,068.69 per token, and now retains approximately 69,800 ETH in its reserves as of the latest report.
The proceeds from this sale are expected to be significantly directed towards redeeming the company’s senior secured convertible notes.
On July 29, ETHZilla transitioned from 180 Life Sciences Corp to focus on Ether investments, moving away from its previous biotechnology endeavors. This shift comes after the previous clinical-stage biotech company’s shares plummeted by over 99.9% since its public debut in 2020.
The announcement follows ETHZilla’s two acquisitions in December, where it secured a 20% fully diluted stake in automotive-finance AI startup Karus and a 15% stake in the digital housing lender Zippy.
The company’s stock witnessed an 8.7% decrease at the close of trading on Monday and has now experienced a decline of more than 65% year-to-date, as per Google Finance data.
Digital Asset Treasuries Adjust Amid Price Drops
As observed, publicly traded firms are increasingly enhancing their Bitcoin exposure this year, according to reports. More than 190 listed companies currently hold Bitcoin, accounting for over 5% of its total circulating supply.
Similarly, Ether has also attracted substantial investor interest, with around 27 public firms holding approximately 6 million ETH, which also represents about 5% of Ether’s circulating supply.
Given the decline in Bitcoin’s market value and the subsequent impact on altcoins like Ether, many digital asset treasury companies are divesting their assets to fortify their balance sheets. For instance, FG Nexus began selling its Ether to fund a share repurchase program, and Sequans Communications redeemed 50% of its convertible debt by divesting Bitcoin.
Overall, ETHZilla’s strategic measures and the broader market adjustments reflect a dynamic and challenging crypto landscape.
