Reddit Sells Most of Its Bitcoin and Ethereum Holdings Ahead of IPO, Expressing Doubts About Blockchain's Long-Term Adoption

Reddit has made a significant move by selling most of its cryptocurrency holdings, according to a recent filing with the U.S. Securities and Exchange Commission (SEC).

Reddit has sold the majority of its cryptocurrency holdings, according to a recent filing with the U.S. Securities and Exchange Commission (SEC).

The popular social media company had initially purchased Bitcoin and Ethereum as part of its treasury holdings, but the sales took place in the third quarter of this year, the filing shows.

Reddit now classes the remaining crypto on its balance sheet as “immaterial,” indicating that it no longer sees major value in maintaining large cryptocurrency holdings. The sale also comes as part of Reddit’s ongoing shift in strategy as it prepares for an initial public offering (IPO), aiming to improve its financial stability and focus.

However, the decision to offload its digital assets appears to have cost Reddit a potential windfall, as Bitcoin has experienced a significant price rally recently, nearly reaching its all-time high this October.

Reddit sold its Bitcoin during a period when prices ranged between $54,000 and $68,000, missing out on recent gains that saw the Bitcoin approach $73,000. The rally, which is part of “Uptober,” a month that has historically seen large crypto gains, highlights the volatility and opportunity cost of holding cryptocurrencies in a corporate treasury.

Reddit’s involvement with cryptocurrencies, particularly Bitcoin and Ethereum, was part of ambitious goals to integrate blockchain technology within its platform. This included the introduction of the Vault cryptocurrency wallet and collectible avatars, which allowed users to own digital items on the Ethereum blockchain via Polygon (MATIC).

But the company has also distanced itself from many crypto-related projects, such as the Moons token and Collectible Expressions, which were later sunset.

Reddit’s stock surged 41% on Wednesday to $116 per share, with the company also reporting $30 million in net income, which surpassed expectations and rebounded from a $7.4 million loss in the same quarter last year.

In its recent filing, Reddit also expressed doubts about the long-term adoption of blockchain, highlighting crypto’s speculative risks. Reddit’s revised policy now requires board approval for any future crypto investments, and will limit these to assets “likely not securities” to avoid regulatory issues.

Despite reducing its crypto investments, Reddit’s app still features the Vault wallet, which gives users access to crypto rewards. While Reddit’s Collectible Avatars also saw success with over 18 million tokens minted, the company’s recent actions suggest a more cautious approach to blockchain.

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