Reddit, the social media powerhouse known for its vibrant crypto community, has officially sold a significant portion of its cryptocurrency assets, as revealed in a recent filing with the U.S. Securities and Exchange Commission (SEC). The company reported that during the third quarter of 2024, it divested most of its Bitcoin (BTC) and Ethereum (ETH) holdings, generating approximately $6.87 million from the sale.
In its regulatory filing, Reddit stated, “During the three months ended September 30, 2024, we sold the majority of our cryptocurrency portfolio, which consisted primarily of Bitcoin and Ether. The net carrying value of our cryptocurrencies, as well as the gain recognized on sale, was immaterial for the periods presented.” By the end of Q3, all treasury-held Bitcoin and Ethereum had been liquidated.
Despite this substantial sell-off, Reddit plans to retain certain crypto assets and continue exploring blockchain technology. The firm noted that it previously invested a portion of its excess cash reserves in Bitcoin and Ethereum and will still acquire Ether and Polygon (MATIC) as payment for specific virtual goods. However, these transactions have not significantly impacted their financials for the year.
Reddit’s initial investments in Bitcoin and Ethereum were made in February 2024, just ahead of its anticipated initial public offering (IPO). Historically, Reddit has been at the forefront of cryptocurrency engagement, having accepted premium membership payments in crypto since 2013 and launching an Ethereum-based Community Points system in 2020.
However, the latest SEC filing indicates a shift in Reddit’s approach to cryptocurrencies. While acknowledging the potential of digital assets, the company expressed concerns about their long-term viability and has updated its investment policy to require board approval for any future crypto acquisitions. This cautious stance is further reflected in Reddit’s decision to phase out its Community Points system due to scalability issues and discontinue accepting cryptocurrencies for payments.
Interestingly, this divestment comes just before a recent rally in Bitcoin prices, which approached an all-time high near $73,737. As Reddit navigates this evolving landscape, it remains committed to leveraging blockchain technology while reassessing its role in the cryptocurrency market.
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