Ether treasury company ETHZilla is poised to raise an additional $350 million through new convertible bonds, with plans to utilize these funds for purchasing more Ether (ETH) and generating yield through various investments within the Ethereum ecosystem. McAndrew Rudisill, the chairman and CEO of ETHZilla, outlined the company’s strategy during a recent announcement, emphasizing the deployment of Ether in “cash-flowing assets” on the Ethereum network, particularly through layer-2 protocols and tokenizing real-world assets.
Rudisill expressed confidence in the scalability of ETHZilla’s business model, highlighting its significant fixed operating leverage and consistent positive cash flow. This aligns with a broader trend among digital asset companies that are increasingly seeking to leverage their holdings rather than merely holding cryptocurrency. Industry executives have suggested that this shift could lead to what they refer to as a “DeFi Summer 2.0,” which would invigorate the decentralized finance sector.
ETHZilla has already made strides in the ecosystem, reportedly earning 1.5 million in unnamed tokens through its engagement. The company stated, “ETHZilla continues to actively deploy capital across the Ethereum ecosystem, strategically supporting a diverse range of protocols that drive innovation, long-term network growth, and differentiated yield.” Previously, the company raised $156.5 million through convertible bonds, combining this with the new funding round could give ETHZilla a substantial capital reserve of over $506 million.
This capital could allow ETHZilla to acquire an additional 120,000 Ether tokens, thus increasing their existing holdings of over 102,000 tokens, which are currently valued at more than $428 million. With this potential acquisition, ETHZilla would solidify its position as the eighth-largest Ether treasury company among 69 listed entities, collectively holding 5.25 million tokens worth over $22 billion, representing 4.25% of the circulating supply.
Previously known as Life Sciences Corp, a biotechnology firm listed on Nasdaq, ETHZilla underwent a significant rebranding in July to focus on Ether investments. The company has faced challenges, with its stock price plummeting more than 99% since its initial public offering (IPO) in 2020, partly due to a lack of revenue and repeated efforts to dilute shares to raise capital. However, there have been signs of recovery; the stock has registered a 31% year-to-date increase, with August achieving its highest trading price at $10.70.
In the most recent trading session, ETHZilla’s stock experienced a 5% decline during regular hours, but rebounded by 2% in after-hours trading, settling at $2.45. Overall, this evolving strategy reflects an increasingly aggressive stance in the face of a shifting digital asset landscape.
