100,000 ETH coins "bleeding" all night! Public companies reveal their "trust," has the entire crypto world been deceived?

At 3:17 AM, a screenshot of an SEC document exploded in the top crypto KOL group.
ETHZilla, a company once dubbed the "trust benchmark for ETH Wall Street," in the latest F-6 document revealed coldly:
"Until December 20, 2024, the company has sold 24,000 ETH coins at an average price of $3,068 USD. The proceeds from sales are used to pay debts and maintain operations. The company reserves the right to sell remaining ETH positions in the future."
This is not just profit-taking. This is a company once considered a "coin hoarding textbook" by many retail investors, which openly admits in regulatory documents: "Our strategic reserves" are just a story, and now that story can no longer continue.
Everyone falls silent for a minute.
Then an old miner who has been in the crypto world since 2013 types a sentence: "So all this time, what we've been storing isn't coins, but beliefs? Oh no, this is a joke."
One, when "faith" turns into "blood pockets": A carefully planned escape
ETHZilla's collapse makes the entire industry feel horrified, not because of how much ETH was sold, but because it truly lifts the curtain on "public companies holding coins."
Between 2021-2023, ETHZilla's CEO repeatedly spoke in front of CNBC cameras: "ETH is the oil of the digital era," "Our ownership is a guarantee of shareholder value," "Short-term fluctuations do not affect long-term confidence."
What was the result?
• When the company's cash flow becomes tight, the first thing cut is "trust"
• When debt maturity arrives, what is called "strategic reserves" turns into "emergency blood pockets"
• Even more surprisingly, according to on-chain analysis, of the 24,000 ETH sold by ETHZilla, 60% flowed into decentralized stablecoin protocols.
They are not leaving the crypto world but are shifting battlegrounds.
"Over the past 18 months, we have observed that out of more than 40 public companies disclosing ETH holdings, 12 have reduced their holdings to varying degrees," reports blockchain data company ChainArgos, "but like ETHZilla, which explicitly listed 'rights to sell out' in SEC documents, this is the first."
Two, three dead ends of the "strategic reserve" narrative revival
The ETHZilla incident reveals a cruel truth: the principle of "maximizing shareholder value" from traditional corporate law fundamentally conflicts with the "HODL(" long-term culture in the crypto world.
Dead point 1: Volatile assets cannot serve as "reserves"
What is the financial definition of "reserves"? Available at any time, stable value, no need to sell at a discount.
Which ETH matches this?
VeriLedger founder firmly states: "When ETH prices fluctuate more than 40% within 3 months, it cannot be considered 'reserves,' but rather 'speculative positions.'"
Even more deadly is the liquidity trap: the larger the company, the more positions it holds, and when liquidating, it becomes easier to cause a price plunge, ultimately harming shareholder interests. ETHZilla's sale this time immediately caused ETH prices to drop 4.7% within 6 hours of the announcement, reducing the company's holdings by more than $30 million.
Weak point 2: Cash flow pressure is always the top priority.
"Wall Street doesn't care about stories; all they see is cash flow," a hedge fund analyst who preferred to remain anonymous told me, "ETHZilla's operational cash flow over the last four quarters has been negative $120 million, with only $38 million in cash remaining. Meanwhile, debt maturing in Q1 2025 amounts to $240 million."
"Do you think the CEO will choose to breach contracts for 'faith,' or sell ETH to survive?"
The answer is clear.
Deadly Point 3: "Hidden Bomb" in Accounting Processing
Most investors don't know that, according to US GAAP principles, cryptocurrencies are classified as "indefinite-lived intangible assets," which must be recorded at historical cost. When market prices fall below cost, impairment losses must be recorded, but price increases cannot be included in profits.
What does this mean?
• ETH drops: The company's income statement changes immediately, stock prices are pressured
• ETH rises: no benefits can be enjoyed on paper
"This asymmetric accounting treatment makes public companies holding ETH a game of only losing without winning," said a former partner from a Big Four accounting firm, "Any rational CFO would choose to exit while the market still allows."
Three, a new world for institutional funds: Why do stablecoin protocols become "lifebuoys"?
While ETHZilla is busy "selling houses and blood," another set of data worth noting:
According to DeFiLlama statistics, in Q4 2024, the growth of institutional deposits in decentralized stablecoin protocols ), including USDD, DAI, FRAX, and others, increased by 217%, with a total exceeding $18 billion USD.
Institutions are leaving ETH but are crazily entering stablecoins? Is this logic wrong?
Actually, they are playing a higher-level game.
"We are not buying stablecoins; we are building an 'on-chain cash management system' unaffected by fluctuations in individual assets," revealed the head of digital assets at a European family office.
For example, the benefits of decentralized dollar protocols are:
✅ Three functions in one = stablecoin + interest-earning assets + collateral
• Holding will earn an annual yield of 3-8% ( derived from the yield of underlying assets )
• Without selling, you can borrow USDT/USDC as collateral to obtain liquidity
• Supports instant cross-chain transfers, avoiding single-chain risk
✅ Transparent and verifiable underlying assets
• Each USDD is backed by excess collateral assets such as ( ETH, BTC, short-term government bonds, etc. ).
• Collateral ratios, ownership addresses, and income sources are all public on the blockchain
• Avoids the "black box operation" trust crisis of traditional companies
✅ Maximize financial flexibility
• Need cash? Collateralize USDD loans without triggering taxable events
• Market crashes? Automatic liquidation protection mechanisms for collateral
• Opportunities arise? Instant conversions, don’t miss any alpha.