The Crypto Treasury Strategy is Pushing Back: Strategy and ETHZilla Stop Accumulating, Begin Emergency Pivot

The digital asset accumulation model that became trendy in the first half of the year is now presenting tangible challenges. Amid ongoing crypto market volatility, the two leading companies pioneering this strategy have ceased their aggressive acquisition approach and shifted toward financial preservation.

The Market is Changing: Why Have the Efforts Stopped?

In early October, Bitcoin reached an all-time high, but since then, it has fallen by nearly 30%. This market correction directly impacted public companies that built their business models around token accumulation. The Strategy, which pioneered this approach, allocated $748 million from common stock sales to strengthen its cash position to $2.19 billion last week, but the key detail is the temporary halt in Bitcoin acquisitions.

This decision was not random. According to TD Cowen’s analysis, the Strategy needs to pay approximately $824 million annually for interest and other financial obligations. Its software business’s free cash flow is insufficient to cover these expenses, making the strategic pause a necessity.

ETHZilla: From Token Builder to Token Seller

ETHZilla’s transformation is even more dramatic. In August, the former biotech company rebranded as 180 Life Sciences Corp. and announced a strategic shift toward an Ethereum accumulation model. The market responded positively—the stock price rose from $30 to over $100.

But the narrative quickly changed. In a filing with the SEC this Monday, the company reported selling $74.5 million worth of Ethereum to pay debt obligations. This is the second time in four months that it has taken such a step—last October, it also earned $40 million in Ethereum for stock buyback initiatives.

As of December 19, ETHZilla still holds approximately 69,800 Ethereum tokens, with an estimated value of $210 million at current market prices. However, the consistent token liquidation indicates shifting priorities. The company stated it will continue exploring various funding strategies, including additional equity issuances and asset tokenization ventures.

The Fundamental Question: Does This Model Make Sense?

The core issue that has surfaced is fundamental to the business logic itself. The original premise of the crypto treasury strategy is simple: when a public company holds tokens, the intrinsic value of that asset increases due to institutional backing. But in the context of sustained market downturns and mounting financial pressures, this premise is becoming increasingly questionable.

The Strategy’s mNAV ( (modified net asset value) is currently at 1.1—a metric that previously carried a substantial premium but has gradually deteriorated. The stock performance reflects this sentiment: down over 50% in the past three months, paralleling broader crypto market weakness.

The Larger Implication for the Industry

The efforts of Strategy and ETHZilla are not isolated incidents. Earlier this year, hundreds of companies followed this playbook. But as the initial momentum waned, structural challenges became more apparent.

Peter Thiel, the billionaire backer of ETHZilla, has exposure to the crypto ecosystem through multiple ventures—from ETHZilla itself to early investments in the Bullish exchange platform. The reported plans of Erebor, a Thiel-backed crypto-friendly bank, to raise ) million at a $4.35 billion valuation, demonstrate continued appetite for crypto initiatives, though this appetite is now more selective.

Conclusion: Strategic Recalibration, Not Crisis

The temporary pause by the Strategy and ETHZilla’s forced asset sales are not necessarily negative—they are pragmatic responses to evolving market conditions. The business model itself is not necessarily broken; rather, the execution context has fundamentally changed. The crucial metric will be whether these companies can navigate near-term financial pressures while maintaining long-term crypto conviction, or if the crypto treasury strategy will become a historical footnote of this market cycle in 2024.