ETHZilla has sold $40 million worth of Ether (ETH) to finance a share buyback, aiming to narrow the discount between its market capitalization and the value of its Ethereum reserves. The move makes it the first ETH-reserve DAT company to liquidate part of its holdings for a repurchase program. ETHZ shares surged more than 40% to about $23 by October 28, though they remain well below mid-August highs.
The sale and buyback began on Friday, October 24. The company said it plans to continue repurchases until pricing “normalizes,” noting that the estimated value of its ETH reserves has exceeded the company’s market cap. Despite the latest rebound, ETHZ is still down more than 85% from a local peak near $175 reached in mid-August amid enthusiasm over its pivot to an Ethereum accumulation strategy. Before that pivot, the stock traded in the $7–$9 range.
ETHZilla’s decision marks a departure from the typical Digital Asset Treasury (DAT) playbook, where publicly traded firms accumulate crypto reserves and potentially generate passive income via staking or decentralized finance (DeFi) deployments. By contrast, selling reserves to fund buybacks sacrifices some exposure to ETH upside.
Analysts have noted alternative approaches that would allow repurchases without selling Ether, such as borrowing liquidity against ETH collateral in DeFi protocols like Aave. Questions have also been raised about why cash on the balance sheet was not used to finance the program, referencing figures disclosed in last month’s financial report.
The buyback is intended to close the gap between ETHZ’s share price and the estimated net value of its Ethereum holdings. Whether it succeeds will depend on the scale and pace of repurchases, broader market conditions for ETH, and the company’s willingness to explore DeFi-based financing instead of additional asset sales.