ETHZilla's Sale Brought Price Increase

The Ethereum (ETH) focused digital asset treasury ETHZilla (ETHZ) has initiated a share buyback program by selling approximately 40 million dollars worth of Ethereum. This surprising move caused the ETHZ stock to rise by as much as 14.5% during the day, with the stock trading above 22.50 dollars at the time of writing.

However, the ETHZilla stock price remains at just one-fifth of its peak around 107 dollars when the company announced its plans to build an Ethereum treasury. The company's board of directors repurchased 600 thousand shares for approximately 12 million dollars using the proceeds from the Ethereum sale made on October 24, following the 250 million dollar share buyback program approved in August.

ETHZilla has expressed its intention to use the remaining funds for additional share purchases and stated that sales would continue "as long as the shares are priced at a discount to their net asset value (NAV)." The company's Chairman of the Board, McAndrew Rudisill, noted that the share buybacks aim to increase the company's asset value. In this context, ETHZilla still holds approximately 400 million dollars worth of Ethereum on its balance sheet.

In August, Peter Thiel's Founders Fund purchased a 7.5% stake in ETHZilla's shares. However, ETHZilla is not the only Ethereum treasury to make a buyback decision. The second largest Ethereum treasury in the sector, SharpLink Gaming (SBET), also announced a buyback program worth 1.5 billion dollars, stating that it would buy back shares when they are undervalued compared to their net asset value.

ETHZilla’s move indicates that institutional Ethereum investors are starting to take strategic positions based on market value. Key points for investors to pay attention to include the continuation of the share buyback program and Ethereum's market dynamics.