Reddit Sells Bitcoin Stash and Moves Away from Crypto: Details

Reddit, a pioneering social media force for crypto participation and arguably the most popular discussion forum, unloaded a substantial portion of its virtual asset holdings in the third quarter of 2024.

In its latest regulatory filing, the company disclosed that it sold most of its Bitcoin (BTC) and Ethereum (ETH) treasury assets, generating $6.87 million.

Reddit turns a profit

The tidy sum raised from the sale helped Reddit turn a profit for the first time in its 19 years of existence, for just under $30 million.

It first disclosed crypto investments in a February 2024 IPO to the Securities and Exchange Commission (SEC), stating that it had invested some of its excess cash reserves in various cryptocurrencies, including BTC, ETH, and Polygon (MATIC).

According to this filing, ETH and MATIC were primarily intended to make payments for specific virtual goods.

At the time, it said the net book value of the assets in question was “immaterial”. The social platform also indicated that it would not invest in any other cryptocurrencies unless the relevant authorities confirmed that they were not securities.

For years, the platform has maintained a strong association with cryptography, being one of the first spaces to experiment with blockchain technology. Some memorable milestones include their decision in 2013 to accept premium membership payments via crypto.

Additionally, in 2020, it launched a community points system based on Ethereum, which pioneered participation 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 launch of polygon-based NFT avatars in 2021.

Withdraw from crypto-driven strategies

However, in its latest filing with the SEC, Reddit expressed an evolving view of crypto assets. While acknowledging the industry’s “significant potential,” the company said it was concerned about the uncertainties surrounding its long-term adoption.

It has also 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.

Additionally, the platform has since discontinued its community points system, blaming the move on scalability challenges. It has also phased out its acceptance of cryptocurrency for payments, reflecting a gradual scaling back of 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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