ETHZilla Approves $250 Million Share Buyback Program
ETHZilla, a treasury company that recently transitioned from its original focus on biotechnology to cryptocurrency, has announced the approval of a $250 million share repurchase program — indicating that some companies may increasingly leverage gains from digital assets as a source of liquidity.
The company’s board of directors has authorized the buyback of up to $250 million in outstanding common shares, according to a disclosure made on Monday. ETHZilla currently has 165.4 million shares outstanding.
This decision comes less than a month after the firm rebranded from 180 Life Sciences and made Ether (ETH) its primary strategy — a shift that has contributed to the recovery of its previously struggling stock.
Since then, ETHZilla has acquired 102,237 ETH at an average price of $3,948.72, totaling just over $403 million. At current market valuations, these holdings are estimated to be worth around $489 million. The company stated that its latest ETH acquisitions will be staked with Electric Capital.
The management’s remarks regarding the repurchase reflected typical considerations, referring to “market conditions,” “management discretion,” and “alternative uses of capital.”
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Context of ETHZilla’s Strategy
ETHZilla’s new approach is set against a backdrop of weak fundamentals. As a public entity, it has faced challenges related to limited revenues, ongoing losses, and shareholder dilution. Last year, it reported a cumulative deficit exceeding $141.5 million.
ETHZilla is not isolated in recognizing crypto as a balance-sheet asset. Companies from both the digital-asset sector and beyond — such as BitMine Immersion Technologies, The Ether Machine, SharpLink Gaming, Bit Digital, and Ether Capital Corp. — have also made strategic Ether acquisitions.
Concerns and Comparisons in the Crypto Space
Analysts draw comparisons between current “crypto treasury” activities and prior corporate gold adoption trends, while cautioning that leverage-based balance sheet expansions pose significant risks. Companies that heavily borrow to accumulate crypto could face deteriorating financial conditions if — or when — a bear market reoccurs.
Mike Foy, chief financial officer at Amina Bank, mentioned that it is too soon to assess whether crypto-treasury strategies are viable in the long run. He emphasized the importance of discerning if companies are adopting this approach for speculative gains, signaling, or as part of a broader strategic agenda.
“If any of these [purchases] seem unusual or deviating from the norm, then this might suggest that this isn’t a long-term strategy but rather a short-term effort to influence share prices,” Foy stated.
Risks and Rewards of Ether Treasury Firms
Kadan Stadelmann, chief technology officer at Komodo Platform, likened ETH treasury firms to spot exchange-traded funds (ETFs), highlighting that the former can deliver advantages not available through ETFs. “Spot ETFs cannot legally offer staking and DeFi,” he noted. “Ethereum treasury firms provide higher yields.”
However, Stadelmann warned that this model carries substantial risks. “ETH treasury firms run the risk of overleveraging,” he cautioned. In a bear market, this could lead to forced liquidations, potentially resulting in cascading effects on Ether’s value.
A downturn in ETH prices could jeopardize debt-financed strategies at companies that obtained their holdings through loans, convertible notes, or equity dilution.
According to Anthony DeMartino, founder and CEO of Sentora Research, of the existing digital asset treasury strategies, Ether is currently the most vulnerable, with about 3.4% of its total supply held by such entities.
