Reddit converts profits into Bitcoin and Ethereum
Social media giant Reddit has been using its profits to add a small amount of Bitcoin (BTC) and Ether (ETH) to its coffers since 2022, and believes crypto and blockchain have “huge potential,” new reports show.
“We have invested some of our excess cash reserves in Bitcoin and Ether,” Reddit said in an initial public offering filed by the United States Securities and Exchange Commission on February 22.
Just in: Reddit pours its surplus cash into #Bitcoin
It's just getting started pic.twitter.com/082krriUdb
— Vivek⚡️ (@Vivek4real_) February 22, 2024
Reddit said bitcoin and ether were the only cryptocurrencies held in the company's treasury as of December 31, 2023, but said the amounts were “absurd.”
“The value of our cryptocurrencies, which primarily consists of Bitcoin and Ether, as well as all related cryptocurrencies, was undervalued during the period presented.”
“It's an experiment,” Reddit added.[ing] With blockchain technology” by buying Ether and Polygon (MATIC) as a form of payment for the sale of some virtual goods.
The firm said that Ether and Polygon, which it received in 2022 and 2023, are “not material,” but that it will continue to use the two cryptocurrencies as payment methods in the future.
I was curious why Reddit S-1 hit one of my Bloenberg alerts that I use to track Crypto ETP documents. Because you bought #Bitcoin and #Ethereum pic.twitter.com/oTB1xdrnXN
— James Seyff (@JSeyff) February 22, 2024
Reddit said its product and engineering team holds cryptocurrencies for “certain services,” but did not specify which ones or how much.
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Reddit says it sees “tremendous potential” in blockchain-related technologies, but remains unsure whether business and consumer adoption will continue.
“While we believe cryptocurrencies and blockchain technology have great potential, the popularity and expansion of cryptocurrencies is a relatively recent trend, and it is uncertain whether cryptocurrencies and blockchain technology will continue to be used by consumers and businesses in the long term.”
According to the S-1 filing — used by companies planning to go public — Reddit posted a net loss of $90.8 million in 2023, even as revenue rose 20.6% year over year to $804 million.
Reddit in 2012 It was valued at $10 billion after it was funded by 2021, but now may only get half that figure, according to a Jan. 28 Bloomberg report.
In October, Reddit shut down its blockchain-based rewards service “Community Points,” which rewarded users with points for positive engagement on certain subreddits. The firm cited downsizing concerns as the main reason for the closure.
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