ETHZilla's Net Asset Value Issue: An Overview of Jet Engines and Tokenization Strategy

Ethereum-focused treasury company ETHZilla made a radical move amid recent market pressures. According to regulatory filings with the SEC, the company purchased two CFM56-7B24 jet engines through a $12.2 million deal via its newly established aerospace subsidiary, ETHZilla Aerospace LLC. This acquisition exemplifies an interesting intersection between the crypto industry and traditional finance and may also reflect broader challenges faced by digital asset treasuries.

Why Are Digital Asset Treasuries Trading Below Net Asset Value?

ETHZilla’s strategic move arises in the context of increasing pressure on digital asset treasuries. Over the past years, many publicly traded companies that aggressively raised funds to accumulate tokens are now experiencing significant discrepancies between the net asset value of their crypto holdings and their market capitalization. Shares are trading well below the underlying asset base, leaving limited room for new capital raises.

ETHZilla itself is a typical example of this situation. In October 2025, the company sold $40 million worth of ETH to finance a share buyback program. Subsequently, in December, it sold an additional $74.5 million worth of Ether to reduce debt burdens. In total, ETH sales amounted to $114.5 million, and the company’s stock value has lost approximately 97% since its August peak. As of early 2026, ETH is trading at $2,380, with a 24-hour decline of 10.27%.

Investment in the Aviation Sector: Applying Traditional Financial Logic

Although it may seem odd to purchase jet engines and lease them to airlines, this strategy is actually a traditional practice within the aviation industry. Well-known firms such as AerCap, Willis Lease Finance Corporation, and SMBC Aero Engine Lease have been operating in this sector for years. Airlines lease spare engines to ensure their operations continue smoothly when primary engines fail.

Currently, the global aviation sector faces a serious engine supply shortage. According to reports from the International Air Transport Association (IATA), airline members will need to pay approximately $2.6 billion for additional spare engines. In their efforts to fill this gap, new investors like ETHZilla are entering the market.

Researchers estimate that the global aircraft engine leasing market will grow from $11.17 billion in 2025 to $15.56 billion by 2031, with an average annual growth rate of 5.68%. This growth potential appears attractive in the context of digital asset treasuries seeking traditional income sources.

According to the agreement made by ETHZilla, the engines are currently leased to a major airline and are managed under a management agreement with Aero Engine Solutions, for a monthly fee. The contract also includes an option for either party to purchase or sell these assets at the end of the lease term for $3 million per engine, provided the engines are in suitable condition.

Tokenization: ETHZilla’s Future Strategy

However, purchasing jet engines is only part of ETHZilla’s broader strategic vision. The company has ambitious plans to transfer real-world assets (RWA) onto the blockchain. In a shareholder letter published in December, ETHZilla announced its plans to tokenize assets. To do this, it will partner with Liquidity.io, a licensed broker-dealer and SEC-registered alternative trading system (ATS).

This strategy is supported by the company’s efforts to expand its asset base across various sectors. ETHZilla has acquired a 15% stake in Zippy, a platform focused on residential mortgages, and plans to tokenize these loans on the blockchain. It has also become a stakeholder in the automotive finance platform Karus, initiating tokenization efforts related to auto loans. The company’s ultimate goal is to establish a scalable tokenization infrastructure across asset categories with projected cash flows and global investor demand.

The company aims to launch its first tokenized asset offerings in Q1 2026. These steps are seen as part of a broader effort to add value by bringing traditional financial instruments onto the blockchain. While the investment in jet engines exemplifies this transformation, ETHZilla is working to bridge traditional and crypto finance to address the issues faced by digital asset treasuries.