Reddit joins MicroStrategy and Tesla in investing in cryptocurrencies, revealing holdings in Bitcoin and Ethereum, with plans for future acquisitions.
Following the footsteps of Michael Saylor's MicroStrategy and Elon Musk's Tesla, Reddit has unveiled its cryptocurrency investment strategy, indicating a deliberate pivot in its financial approach.
On February 22nd, the social media giant officially filed for its Initial Public Offering (IPO) with the U.S. Securities and Exchange Commission (SEC). Embedded within the filing was the revelation that,
“We utilized a portion of our surplus cash reserves to invest in Bitcoin and Ether.”
As per the filing details, Reddit has been channeling excess funds into Bitcoin [BTC] and Ethereum [ETH] since the year 2022. As of December 31, 2023, Reddit's treasury exclusively held Bitcoin and Ether.
The filing also disclosed the company's acquisition of Ether and Polygon [MATIC] as a means of transaction for specific virtual goods, affirming its commitment to continuing this strategy in the future.
While the specific amount of cryptocurrency held by Reddit remains undisclosed, the company emphasized that the valuation of these assets is considered “immaterial.”
“The net carrying value of our cryptocurrencies, primarily Bitcoin and Ether, along with all associated cryptocurrency activities, was deemed immaterial for the periods covered.”
Reddit conveyed its optimism regarding the "significant potential" of blockchain-related technologies, acknowledging the uncertainty surrounding widespread adoption by both businesses and consumers.
“The popularity and prevalence of cryptocurrencies are relatively recent trends, and the long-term adoption by consumers and businesses remains uncertain.”
In summary, despite reporting net losses of $90.8 million, Reddit's revelation of its cryptocurrency holdings triggered slight fluctuations in the prices of Bitcoin, Ether, and its DONUT token.
It will be intriguing to observe the unfolding of the company's experimentation with blockchain technology.