TL;DR
- Reddit has invested its excess cash reserves in Bitcoin and Ether. And has also acquired Polygon (MATIC).
- The disclosure was part of Reddit’s IPO filing with the US SEC, intending to be listed on the New York Stock Exchange under the ticker “RDDT” in March.
Reddit Joins the Bitcoin Investments Trend
Social media network Reddit has been converting its excess cash reserves to Bitcoin (BTC) and Ethereum (ETH) since 2022. And may continue to do so in future.
It filed an S-1 registration statement with the Securities and Exchange Commission (SEC) on February 18th, 2024.
A document necessary for a firm plotting an Initial Public Offering (IPO).
The filing disclosed that the social media giant invested some excess cash reserves in Ether and Bitcoin.
Notably, Reddit holds Bitcoin and Ether for treasury purposes only.
Our investments in cryptocurrencies for treasury purposes are limited to Bitcoin, Ether and any other cryptocurrency that the SEC, Commodities Futures Trading Commission or high-ranking members of the staff of such regulatory bodies may, through public statements or guidance, identify as likely not being a security.
Reddit stated.
The social media giant joins the trend of increased crypto adoption by traditional investors.
This popularity and prevalence of cryptos are relatively recent due to the introduction of Bitcoin ETF products.
Experimenting with Blockchain Technology
Additionally, the filing added that Reddit has been experimenting with blockchain technology.
The firm is buying Ether and Polygon’s native token (MATIC) as a form of payment for sales of certain virtual goods.
Notably, the Ether and MATIC it received are “not material” across 2022 and 2023. However, it will continue using the two digital assets as a payment method.
Interestingly, the social media giant reiterated that its product and engineering team hold cryptos for specific uses.
But it didn’t specify which ones or the amount. It added that it’s venturing into the crypto landscape, subject to exchange risk, additional tax, and legal and regulatory compliance.
The S-1 filing indicates that the social media network would be listed on the New York Stock Exchange under the ticker “RDDT”.
Will Reddit Continue Investing in Crypto in 2024?
The move comes after a tiring, long process with regulators for Reddit to become a publicly traded company.
It first filed a non-public draft with the security watchdog in Dec. 2021, eyeing a March debut on the stock exchange. If things go as planned, it will be the second social media platform to go public since Pinterest in April 2019.
As per S-1 registration, the company recorded $90.8 million in net losses in 2023, but its revenue has increased by 20.6% to $804 million yearly.
Bloomberg data reports that Reddit was valued at 10 billion in 2021 but can only attain half that figure now.
In Oct. 2023, Reddit shut down its Community Points beta program. It was an Ethereum-based reward service that gifted users points for positive engagement with some subreddits.
The social media giant cited scalability as one of the main reasons for ending the program. Bitcoin and Ether prices have had a slight bump following the news of the holdings. But have since pared their gains.
Another Reddit affiliate token, DONUT—the native token representing community points for r/ethtrader subreddits surged by 14% on Feb 23 2024.
Even with future uncertainty in the market, Reddit will not slow down when it comes to investing in crypto.
Will cryptocurrencies and blockchain technology continue to be adopted by consumers and businesses in the long term?
Shawn Munir
Shawn Munir is the CEO of Coinweb.com and spearheads all the collaborative partnerships for the platform. He bought his first Bitcoin in 2017 and never looked back. He is also an investor in 200+ Web3 startups and is considered an expert in the field. Before building Coinweb with his co-founders, he co-founded Presail, a management platform designed for companies and investors to manage their investments in Web 3. In addition to his entrepreneurial endeavors, Shawn serves on the United Nations...
