ETHZilla Sells Ethereum (ETH) to Buyback Shares: Is Crisis Coming?

Jakarta, Pintu News – On Monday, Ethereum cash management company ETHZilla announced it had sold around $40 million of Ethereum (ETH) to fund its share buyback. The move was taken to cover what it called a “significant discount to NAV”.

Since Friday, October 24, the company has repurchased approximately 600,000 common shares worth approximately $12 million, as part of a broader authorization of up to $250 million. The company stated that it will continue to make purchases as long as the discount remains.

ETHZilla Buyback Strategy

ETHZilla described the buyback as balance sheet arbitrage, rather than a strategic withdrawal from their core exposure to Ethereum (ETH). “We leveraged our balance sheet strength, including reducing our ETH holdings, to execute the share buyback,” said McAndrew Rudisill, chairman and CEO of the company.

The sale of ETH was used as “cash” while the common stock traded below net asset value. Rudisill argued that this transaction would immediately benefit the remaining shareholders.

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Concerns over Potential Death Spiral

Popular crypto trader, SalsaTekila (@SalsaTekila), commented on X that this is very bearish, especially if it invites similar behavior from other companies. “If Ethereum cash companies start selling coins to buy their own shares, it’s a death spiral setup,” he said.

Another analyst, Dan Smith, also questioned ETHZilla’s funding choices, why the company chose to sell Ethereum (ETH) and not use the $569 million in cash they had on their balance sheet last month. Smith noted that ETHZilla still has around $400 million of Ethereum (ETH) and did not use it for new Ethereum (ETH) accumulation.

Market Reaction and Future Projections

Beyond the buyback, a retail-driven narrative has been quick to form around the stock. Business Insider reports that Dimitri Semenikhin, who has recently been the face of the Beyond Meat surge, has targeted ETHZilla saying that he bought about 2% of the company at a 50% discount to its modified NAV.

Semenikhin argues that the market is misreading ETHZilla’s balance sheet as it still reflects legacy biotech results rather than the current digital asset cash model. ETHZilla itself emphasized to investors that it will continue to buy as long as the stock is trading below asset value and highlighted the aim to reduce its borrowable supply to alleviate short selling pressure.

Conclusion

With ETHZilla selling Ethereum (ETH) to fund share buybacks, the market may need to consider the potential long-term impact of this action.

While the direct effect on Ethereum (ETH) daily liquidity is limited, the risk of behavior that could spill over to other Ethereum cash firms may require further scrutiny. This demonstrates the importance of careful cash management strategies in maintaining stability and trust in Ethereum (ETH) as a reserve asset.

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Reference

• NewsBTC. Ethereum Treasury Firm Buybacks Could Trigger Death Spiral. Accessed on October 30, 2025