Reddit Sold Off Most of Its Bitcoin and Cryptocurrency Holdings in the Third Quarter

Reddit retains some digital assets, including Ethereum and Polygon tokens from its virtual avatar sales on the Ethereum scaling network.

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

In its initial public offering (IPO) filing earlier this year, Reddit reported holding a small amount of Bitcoin and cryptocurrency, which were funded through excess cash.

The company stated in its latest SEC filing that it sold the majority of its cryptocurrency portfolio, which primarily included Bitcoin and Ether.

“The net carrying value of our cryptocurrencies, as well as the gain recognized on sale, was immaterial,” Reddit added.

While Reddit did not disclose the exact amount of cryptocurrency sold, the timing of the sale in the third quarter, ending September 30th, suggests that the company may have missed out on Bitcoin’s recent price rally.

This month, Bitcoin surged to a high of $73,562, nearing its all-time high of $73,737. During the third quarter, Bitcoin’s price ranged between $54,000 and $68,000.

Reddit still holds some digital assets, such as Ethereum and Polygon tokens, which were acquired through its virtual avatar sales on the Ethereum scaling network.

The company confirmed that it still holds MATIC, even though Polygon is currently migrating its token to POL.

Among social media companies, Reddit was an early adopter of Bitcoin and other digital assets, utilizing them for collectibles and user engagement rewards.

The company’s product and engineering teams continue to be involved with Bitcoin and crypto technology, although it expressed uncertainty regarding the long-term adoption of digital assets.

“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.”

On Wednesday, Reddit's stock surged 41%, reaching $116 per share, after the company exceeded analysts' expectations by reporting a profit of $30 million, compared to a loss of $7.4 million in the same quarter last year.

Since entering the world of Bitcoin and crypto in 2020, Reddit has scaled back its involvement, handing over control of the Moons token to the community and discontinuing its Collectible Expressions feature, which was tied to Polygon-based avatars.

These avatars, which were launched in 2022, saw over 18 million minted and were used to promote events, such as the NFL season.

Under its current investment policy, Reddit stated that any future Bitcoin or crypto investments will require board approval and be limited to BTC, ETH, or other assets that are "likely not being a security."

Reddit's app still includes a digital asset wallet feature, known as Vault, which was introduced as part of the company's vision for a “new frontier.” However, Reddit seems to be exercising greater caution in integrating digital assets into its balance sheet.