Reddit Sells Bitcoin Stash and Steps Away from Crypto: Details

Reddit, a leading social media platform known for its vibrant cryptocurrency community, has recently sold a significant portion of its crypto holdings during the third quarter of 2024. This decision has raised eyebrows within the crypto community.

• The company disclosed in its latest regulatory filing that it sold most of its Bitcoin (BTC) and Ethereum (ETH) assets, yielding $6.87 million.

Profit Milestone for Reddit

The proceeds from this sale contributed to Reddit achieving a profit for the first time in its nearly two-decade history, totaling just under $30 million.

• Reddit initially revealed its investments in cryptocurrencies in a February 2024 IPO filing with the Securities and Exchange Commission (SEC), indicating that it had allocated some of its surplus cash reserves to various digital assets, including BTC, ETH, and Polygon (MATIC).
• The Ethereum and MATIC holdings were primarily intended for payments for specific virtual goods, although their net carrying value was deemed “immaterial” at the time.

Historical Commitment to Crypto

For years, Reddit has been at the forefront of cryptocurrency discussions and innovations. Some notable milestones include:

• In 2013, Reddit began accepting cryptocurrency for premium membership payments.
• In 2020, the platform launched an Ethereum-based Community Points system to engage users through digital assets, utilizing tokens like MOON and BRICK.
• The company also introduced a blockchain wallet called “Vault” for managing these tokens and other digital collectibles, alongside Polygon-based NFT avatars in 2021.

Shift in Strategy Regarding Crypto Assets

In its recent SEC submission, Reddit indicated a shift in its perspective on cryptocurrency. While acknowledging the significant potential of the industry, the company expressed concerns about the long-term adoption of crypto assets.

• Reddit has updated its investment policy to require board approval for any future crypto acquisitions, which will be limited to Bitcoin, Ethereum, and other non-security tokens.
• The platform has also decommissioned its Community Points system, citing scalability issues, and has phased out the acceptance of cryptocurrency for payments. This reflects a broader retreat from previous blockchain initiatives.

Interestingly, Reddit's decision to divest its crypto holdings occurred just before Bitcoin's recent surge, which brought the asset close to its all-time high of $73,737.