Reddit sold off most of its Bitcoin and cryptocurrency holdings in the third quarter, reducing Bitcoin and Ethereum assets previously held “for treasury purposes,” according to a filing with the SEC on Tuesday.
In its February IPO filing, Reddit reported holding a minor amount of Bitcoin and cryptocurrency, funded through excess cash. In the latest report, Reddit again described the sale proceeds as “immaterial.”
“We sold the majority of our cryptocurrency portfolio, which consisted primarily of Bitcoin and Ether,” Reddit stated. “The net carrying value of our cryptocurrencies, as well as the gain recognized on sale, was immaterial.”
While Reddit didn’t specify the exact amount sold, the timing of the sale in Q3, ending September 30th, meant the company missed out on Bitcoin’s recent price surge.
This month, Bitcoin approached its all-time high of $73,737, reaching a high of $73,562. During Q3, Bitcoin’s price ranged between $54,000 and $68,000.
Reddit retains some digital assets, including Ethereum and Polygon tokens from its virtual avatar sales on the Ethereum scaling network. It confirmed holding MATIC, although Polygon is in the process of migrating its token to POL.
Among social media companies, Reddit was an early adopter of Bitcoin and other digital assets, using them for collectibles and user engagement rewards.
The company’s product and engineering teams remain involved with Bitcoin and crypto technology, though it noted uncertainty about the long-term adoption of digital assets.
“While we believe cryptocurrencies and blockchain technology have significant potential, the popularity and prevalence of cryptocurrencies is a relatively recent trend, and whether cryptocurrencies and blockchain technology will continue to be adopted by consumers and businesses in the long term is uncertain.”
On Wednesday, Reddit’s stock price increased by 41%, reaching $116 per share. Reddit exceeded analysts’ expectations by reporting a profit of $30 million, contrasting with a $7.4 million loss in the same quarter last year.
Since entering Bitcoin and crypto in 2020, Reddit has reduced its involvement, transferring control of the Moons token to the community and discontinuing its Collectible Expressions feature tied to Polygon-based avatars. These avatars, launched in 2022, saw over 18 million minted and were sometimes used to promote events like the NFL season.
Under its current investment policy, Reddit stated that future Bitcoin and crypto investments would require board approval and be limited to Bitcoin, Ethereum, or other assets identified as “likely not being a security.”
Reddit’s app still includes a digital asset wallet feature, Vault, introduced as part of its vision for a “new frontier.” However, Reddit appears to be more selective about incorporating digital assets into its balance sheet.
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