The popular social media platform Reddit has recently disclosed that it has been investing some of its excess cash in Bitcoin (BTC) and Ether (ETH) since 2022. According to filings submitted to the United States Securities and Exchange Commission on February 22, Reddit believes that cryptocurrencies and blockchain technology have immense potential.
In its public filing, Reddit stated that it had invested in Bitcoin and Ether using its surplus cash reserves. As of December 31, 2023, these two cryptocurrencies were the only ones held in the company’s treasury. However, Reddit emphasized that the amounts invested were insignificant.
Furthermore, Reddit revealed that it has been exploring the use of blockchain technology by purchasing Ether and Polygon’s MATIC as a means of payment for certain virtual goods. Although the amounts received from these transactions were also deemed immaterial in 2022 and 2023, Reddit expressed the possibility of continuing to adopt these cryptocurrencies as payment methods in the future.
In addition to these investments, Reddit mentioned that its product and engineering team holds cryptocurrencies for specific purposes. However, the specific cryptocurrencies held and the quantities were not disclosed.
Reddit has expressed its belief in the substantial potential of blockchain-related technologies. However, the company remains uncertain about the future adoption of these technologies by businesses and consumers.
According to the S-1 registration, which is typically used by companies planning to go public, Reddit reported a net loss of $90.8 million in 2023. Nevertheless, its revenue increased by 20.6% to reach $804 million compared to the previous year.
Although Reddit was valued at $10 billion after its funding round in 2021, a Bloomberg report from January 28 suggests that its valuation may now be halved.
In October, Reddit discontinued its blockchain-based rewards service called “Community Points.” This service rewarded users with points for positive engagement within specific subreddits. The main reason cited for the shutdown was concerns regarding scalability.
Overall, Reddit’s foray into cryptocurrencies and blockchain technology showcases its belief in their potential, despite the uncertainties surrounding adoption. The company’s investments in Bitcoin and Ether, as well as its exploration of blockchain technology, reflect its efforts to stay at the forefront of technological advancements.