As a seasoned crypto investor who’s been through the bull runs of 2017 and the bear markets of 2018, I’ve learned to take news like Reddit selling its majority cryptocurrency holdings with a grain of salt. While it’s concerning that they’ve sold off their Bitcoin and Ether, it’s important to remember that these are treasury holdings and not necessarily indicative of the company’s long-term crypto strategy.
In Q3 of 2024, as reported by a recent SEC filing, Reddit, a popular social media platform, has mainly disposed of its cryptocurrency assets.
Most sales during this timeframe came from our reserves in Bitcoin (BTC) and Ether (ETH). Our 10-Q SEC filing indicates that the total worth of these cryptocurrencies and profits generated from their sales had minimal impact on our financial status for the specified period.
“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.”
The value of cryptocurrency sales revenue during the quarter ending September 30th was reportedly $6.869 million, as mentioned in the document.
Previously, the firm put some of its surplus funds into Bitcoin and Ether. Additionally, it has been purchasing ETH and the MATIC token from Polygon, now called POL, which serves as a method of payment for the sale of specific digital items.
As a researcher, I’ve observed that Reddit disclosed in their financial report that sales of Ethereum (ETH) and Matic (MATIC) during the year ending December 31, 2023, as well as the nine months ending September 30, 2024, were not substantial enough to have a significant impact on their overall performance. Furthermore, this social media giant stated that they retained digital assets for exclusive use by their product and engineering departments, primarily for specified purposes.
Since 2022, Reddit has been putting surplus funds into small investments in cryptocurrencies for its reserves. Earlier in its Initial Public Offering (IPO) filing, the company expressed high regard for cryptocurrencies and blockchain technology, stating that they have a “great deal of potential.
As per Reddit’s guidelines, their treasury can only invest in specific digital assets, which include Bitcoin (BTC), Ethereum (ETH), and any other cryptocurrencies that U.S. regulators have publicly declared as “unlikely to be considered a security.
Crypto advertising slumps
As a crypto investor, I’ve noticed that Reddit’s ad demand has been decreasing since the onset of the pandemic. They attribute this to several factors, including global economic instability, increasing interest rates, and uncertainty in international politics.
“Since the three months ended December 31, 2022, we experienced declines in advertising spending in certain macro-challenged sectors, particularly technology, media and entertainment, and cryptocurrency.”
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2024-10-31 00:16