ETHZilla Crashes 97% as Thiel Abandons ‘Ethereum Treasury’ Model
ETHZilla, a high-profile on-chain treasury play tied to Ethereum exposure, collapsed about 97% on Feb. 19, 2026 after reports that Peter Thiel’s affiliated group walked back plans for an ‘Ethereum Treasury’ strategy. The sudden pivot set off a wave of selling across related positions and amplified panic on social channels — one viral post summed sentiment as “paper hands are bailing, diamond hands are loading up.”
The move matters because it undercuts a prominent institutional thesis for holding ETH as a treasury asset and could make other firms wary of similar on-chain reserve experiments. Market participants say the episode will reverberate through DeFi allocation strategies and short-term ETH liquidity, even as some traders view the drop as a rare buying opportunity. Watch for any official statement from Thiel-linked entities and for broader market flows that will determine whether confidence recovers or the rout deepens.