100,000 ETH "blood collapse" in one night! The listed company tears off the "faith" mask, has the entire crypto world been played?

At 3:17 AM, a screenshot of an SEC document exploded in the top KOL group of the crypto world.

ETHZilla, a listed company once hailed as the "Wall Street ETH faith benchmark", stated in cold words in its latest F-6 filing:

"As of December 20, 2024, the company has sold 24,000 ETH at an average price of $3,068. The proceeds from the sales are used to repay debts and maintain operations. The company reserves the right to sell the remaining ETH holdings in the future."

This is not just a simple profit-taking. This is a publicly listed company that was once regarded as the "textbook for hoarding coins" by countless retail investors, and in regulatory filings, it openly admits: Our "strategic reserves" are just a story, and now the story can no longer be told.

The group was silent for a minute.

Then an old miner who entered the crypto world in 2013 typed a line: "So what we've been hoarding over the years is not coins, but faith? Oh no, it's a joke."

1. When "faith" becomes "blood bags": A meticulously planned escape

The collapse of ETHZilla sends chills down the spine of the entire industry, not because it sold a large amount of ETH, but because it completely tore off the veil of "public companies hoarding coins."

From 2021 to 2023, the CEO of ETHZilla has talked numerous times in front of the cameras on CNBC: "ETH is the oil of the digital age", "Our holdings are a strategic guarantee of shareholder value", "Short-term fluctuations do not affect long-term beliefs".

What is the result?

• When a company's cash flow becomes tight, the first thing to be cut is "faith".

• Once the debt maturity date arrives, the so-called "strategic reserves" turn into "emergency blood bags".

• Ironically, according to on-chain analysts, 60% of the 24,000 ETH sold by ETHZilla flowed into decentralized stablecoin protocols.

They are not exiting the crypto market, but changing battlefields.

"In the past 18 months, we have observed that among more than 40 publicly disclosed listed companies holding ETH, 12 have reduced their holdings to varying degrees," said a report from blockchain data company ChainArgos. "However, ETHZilla is the first company to explicitly retain 'liquidation rights' in its SEC filings."

2. The three major pitfalls of the "strategic reserve" narrative.

The ETHZilla incident exposed a harsh truth: the traditional corporate law principle of "maximizing shareholder value" is fundamentally incompatible with the crypto world's culture of "long-term holding ( HODL )."

Deadlock 1: Volatile assets cannot bear the "reserve" function

What is the financial definition of the term "reserve"? Available at any time, stable in value, and does not require a discount for liquidation.

Which one does ETH comply with?

VeriLedger founder bluntly stated: "When the ETH price fluctuates more than 40% within 3 months, it can no longer be considered a 'reserve', but rather a 'speculative position'."

The more deadly issue is the liquidity trap: the larger the company, the more positions it holds, and the easier it is to cause a price crash when liquidating, ultimately harming shareholder interests. The recent sell-off by ETHZilla directly led to a 4.7% drop in ETH price within 6 hours after the announcement, with the company's holdings losing over 30 million dollars in value.

Deadlock 2: Cash flow pressure is always the top priority.

"Wall Street doesn't care about stories, only cash flow," a hedge fund analyst who wished to remain anonymous told me, "ETHZilla has had an operating cash flow of negative $120 million over the past four quarters, with only $38 million left in cash. And there is $240 million in debt due in Q1 2025."

"Do you think the CEO will choose to default and pay for 'faith', or sell ETH to survive first?"

The answer is obvious.

Deadlock 3: The "Invisible Bomb" in Accounting Treatment

What most investors do not know is that under US GAAP standards, cryptocurrencies are classified as "indefinite intangible assets" and must be recorded at historical cost. Once the market price falls below the cost, impairment losses must be recognized, but price increases cannot be counted as profit.

What does this mean?

• ETH drops: The company's profit statement changes instantly, stock price under pressure

• ETH rises: no benefits can be enjoyed on the books.

"This asymmetric accounting treatment has turned holding ETH for listed companies into a game of only losing and not winning," pointed out a former partner at one of the Big Four accounting firms. "Any rational CFO would choose to exit while the market is still decent."

3. The New Frontier of Institutional Funds: Why Stablecoin Protocols Have Become the "Lifeline"?

While the ETHZillas are busy "dismantling and selling blood", another set of data is worth paying attention to:

According to DeFiLlama statistics, in Q4 2024, the institutional-level deposits of the decentralized stablecoin protocol (, including USDD, DAI, and FRAX, increased by 217%, with a total exceeding $18 billion.

Institutions are fleeing ETH, but are frantically pouring into stablecoins? This logic doesn’t make sense?

In fact, they are playing a more advanced game.

"We are not buying stablecoins; we are building an 'on-chain cash management system' that is not affected by the volatility of a single asset," revealed the head of digital assets at a European family office.

Taking the decentralized dollar protocol as an example, its advantages are:

✅ Three functions in one = stablecoin + interest-bearing asset + collateral

• Hold to earn an annual return of 3-8% ) from underlying asset returns (

• You can borrow USDT/USDC as collateral to obtain liquidity without selling.

• Supports instant cross-chain, avoiding single-chain risks

✅ The underlying assets are transparent and verifiable

• Each USDD is backed by over-collateralized assets such as ) ETH, BTC, and short-term treasury bonds, etc. (

• The collateral rate, holding address, and source of income are all publicly available on-chain.

• Avoided the trust crisis of traditional companies' "black box operations"

✅ Maximize financial flexibility

• Need cash? Pledge USDD for a loan, no taxable event triggered.

• Market crash? The collateral automatic liquidation mechanism protection system

• Opportunity appears? Instant conversion, never miss any alpha.

"If ETHZilla had converted 30% of its ETH holdings into Decentralized USD and participated in liquidity management 18 months earlier, it would not only avoid being forced to sell at a loss now, but it might also have obtained over a hundred million dollars in liquid funds through staking rewards and collateralized lending," lamented the founder of a DeFi protocol.

IV. From "Faith in Holding Coins" to "Liquidity Management": The crypto market is maturing.

The collapse of ETHZilla marks the end of an era.

The core logic of the HODL Era ) is:

• Assets are only bought and not sold.

• Belief in long-term appreciation

• Volatility = Opportunity

The new paradigm of the Liquidity Era (:

• Assets need to "work" ) to earn interest, be mortgaged, and make payments (.

• Cash flow > Faith

• Volatility = Risk

"In 2021, institutions asked us 'which coin should we buy?'. In 2024, they ask 'how to ensure assets have profitability, security, and liquidity simultaneously,'" said the chief investment officer of crypto fund Arca, "this is not a bear market mentality, this is professional financial thinking."

Data evidence:

• In 2024, the TVL share of "yield-bearing stablecoins" in DeFi protocols will increase from 12% to 31%.

• The institutional-level "tokenized national debt" product scale surged from 4 billion to 24 billion USD.

• More than 60% of listed companies with crypto holdings have now adopted a "70% stablecoin + 30% volatile assets" allocation.

The market is rewarding those players who "know how to live" rather than the believers who "know how to tell stories."

V. What should ordinary investors do? Three survival rules

The bloody lesson of ETHZilla, what insights does it provide for retail investors?

Rule 1: Redefine your "reserve" definition

Ask yourself three questions:

1. If you urgently need money tomorrow, how much of your crypto assets can be liquidated without loss?

2. In the past 90 days, how much cash flow has your position generated for you ) instead of unrealized gains (?

3. If ETH falls below 2000 dollars, will your finances be dragged down?

If the answers are not optimistic, it's time to consider "stability configuration". It's not about fleeing the market, but about optimizing the structure.

Suggested configuration:

• 30-50% decentralized stablecoin ) to earn basic income (

• 20-30% mainstream coin staking ) ETH/BTC, locked yield (

• 20-30% high-risk assets ) strive for alpha (

Rule 2: Focus on "real adoption rate" rather than "narrative concepts"

The winners of the next cycle will be those assets that are truly used for payments, collateral, and cross-chain.

Which indicators are worth paying attention to?

• The on-chain transfer volume of stablecoins ) reflects real economic activities (

• The proportion of "yield-bearing assets" in the total locked value of DeFi protocols ) reflects institutional preferences (.

• Tokenization of RWA) real-world assets( scale) reflects compliance process(

Rule 3: Learn "Collateral Thinking" rather than "Sell Thinking"

Next time you want to cash out, ask yourself: "Do I have to sell? Or do I just need liquidity?"

If you only need cash, consider:

• Deposit ETH into Aave/Maker to collateralize and borrow stablecoins.

• Deposit stablecoins into Curve/Convex to earn an annual yield of 15-30%

• Retain ownership of assets while activating liquidity

"Selling is giving up the future, while collateralizing is managing the present," this is the fundamental difference between smart money and retail investors.

Conclusion: When faith collapses, only cash flow is eternal.

At 5 AM, the CEO of ETHZilla posted a photo on Twitter: an empty office, with the caption "Survive first, thrive later" ) first seek survival, then plan for development (.

The comment section is filled with curses.

But in the unknown world of the blockchain, another transaction has just been completed: a Middle Eastern sovereign fund tokenized $50 million of government bond yields, automatically exchanged through a smart contract into a decentralized stablecoin, and deposited it into the yield protocol.

The entire process had no PR materials, no media frenzy, only a block height +1.

Believers of the old era are selling their faith for survival, while builders of the new era are constructing a more resilient financial system in code.

When the sun rises tomorrow, perhaps we will see more clearly:

The true maturity of the crypto market is not about more people hoarding coins, but rather about more people learning how to smartly use these assets to survive and live better.

What do you think about the collapse of "coin-hoarding faith"? Does your asset allocation logic also need an upgrade? Feel free to share your views in the comments!

Like and share with that friend who is still "holding on", maybe this is the truth he needs.

Follow @crypto world miner for the next in-depth analysis: The 5 major DeFi "cash management" protocols that institutions are quietly laying out, how can retail investors replicate?

Disclaimer: This article does not constitute investment advice, the market has risks, and decisions should be made with caution.

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