Reddit Sells Bitcoin Stash and Steps Away From Crypto: Details
Reddit, a pioneering social media force for crypto engagement and arguably the most popular discussion forum, offloaded a substantial portion of its virtual asset holdings in the third quarter of 2024.
In its latest regulatory filing, the company revealed that it sold most of its Bitcoin (BTC) and Ethereum (ETH) treasury assets, generating $6.87 million.
Reddit Hits Profit
The tidy sum raked in from the sale helped Reddit turn a profit for the first time in its 19-year existence, amounting to just under $30 million.
It first revealed the crypto investments in a February 2024 IPO filing with the Securities and Exchange Commission (SEC), stating that it had invested some of its excess cash reserves in several cryptocurrencies, including BTC, ETH, and Polygon (MATIC).
According to that filing, the ETH and MATIC were primarily meant to make payments for specific virtual goods.
At the time, it said that the net carrying value of the assets in question was “immaterial.” The social platform also indicated that it would not be investing in any other cryptocurrencies unless concerned authorities confirmed they were not securities.
For years, the platform has maintained a strong association with crypto, being one of the earliest spaces to experiment with blockchain technology. Some memorable milestones include its decision in 2013 to accept premium membership payments using crypto.
Additionally, in 2020, it launched an Ethereum-based Community Points system, pioneering engagement through digital assets. The system involved two tokens, MOON and BRICK, which the social network used to incentivize contributions within specific subreddits.
The company later developed a blockchain-based wallet called “Vault,” which allowed users to manage the two tokens and other digital collectibles. This was followed by the rollout of Polygon-based NFT avatars in 2021.
Retreat From Crypto-Driven Strategies
However, in its latest submission to the SEC, Reddit expressed an evolving outlook on crypto assets. While acknowledging the industry’s “significant potential,” the company said it was worried about uncertainties surrounding their long-term adoption.
Further, it has reinforced its cautious stance by updating its investment policy to require board approval for any future crypto purchases, which would be limited to Bitcoin, Ethereum, and other non-security tokens.
Moreover, the platform has since decommissioned its Community Points system, blaming the move on scalability challenges. It has also phased out its acceptance of cryptocurrency for payments, reflecting a gradual reduction in blockchain initiatives that previously engaged users.
Interestingly, Reddit’s decision to divest came before Bitcoin’s recent rally, which saw the asset climb agonizingly close to its all-time high of $73,737.
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