Reddit converts excess cash into Bitcoin and Ethereum

The social news network also revealed it has been experimenting with Ether and Polygon as a form of payment for sales of virtual goods.

Social media giant Reddit has been using its excess cash to add small amounts of Bitcoin (BTC) and Ether (ETH) to its treasury since 2022 and believes crypto and blockchain have “significant potential,” new filings reveal.

“We invested some of our excess cash reserves in Bitcoin and Ether,” Reddit stated in a Feb. 22 initial public offering filing with the United States Securities and Exchange Commission.

JUST IN:
Reddit has invested its excess cash reserves in #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 firm’s treasury as of Dec. 31, 2023, but also said the amounts are “immaterial.”

“The net carrying value of our cryptocurrencies, which consisted primarily of Bitcoin and Ether, as well as all related cryptocurrency activity, was immaterial for the periods presented.”

Reddit added that it has been “experiment[ing] with blockchain technology” by buying Ether and Polygon (MATIC) as a form of payment for the sales of certain virtual goods.

The firm said the Ether and Polygon it received were also “not material” across 2022 and 2023 but that it may continue to use the two cryptocurrencies as a payment method in the future.

Was very intrigued why a Reddit S-1 hit one of my Bloomberg Alerts that i use to track Crypto ETP filings. It’s because they bought #Bitcoin and #Ethereum https://t.co/VS9M3Gslkf pic.twitter.com/oTB1xdrnXN

— James Seyffart (@JSeyff) February 22, 2024

Reddit said its product and engineering team also holds cryptocurrencies for “specific uses,” but didn’t specify which ones or the amount.

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Reddit also said it sees “significant potential” in blockchain-related technologies but isn’t sure whether business and consumer adoption will continue.

“While we believe cryptocurrencies and blockchain technology have significant potential, the popularity and prevalence of cryptocurrencies is a relatively recent trend, and whether cryptocurrencies and blockchain technology will continue to be adopted by consumers and businesses in the long term is uncertain.”

The S-1 registration — used by companies planning on going public — revealed that Reddit recorded $90.8 million in net losses in 2023, though its revenue increased 20.6% to $804 million year-on-year.

Reddit was valued at $10 billion after its funding round in 2021, but it may now only attain half that figure, according to a Jan. 28 Bloomberg report.

In October, Reddit shuttered its blockchain-based rewards service, “Community Points,” which rewarded users with points for positive engagement in certain subreddits. The firm cited scalability concerns as the main reason for the shutdown.