- Social media giant Reddit has relinquished the majority of its crypto holdings, in a sale worth nearly US $7b.
- Previously, Reddit had revealed ownership of Bitcoin, Ethereum and MATIC while championing several uses of digital currency on its platform.
- The move comes as Reddit looks to mitigate “unique risks” that come alongside holding digital assets.
- Unfortunately for the company, Bitcoin pumped almost seconds after they sold, resulting in significant opportunity cost.
Reddit can be either the best place on the internet…or (perhaps more often than not) the worst.
But love it or hate it, the social media platform is one of the biggest success stories of the 21st century and has a huge impact on online culture. The company has had a long history with digital assets, being one of the first mainstream forums to facilitate “tipping” using crypto while also integrating NFT avatars.
However, it appears the higher-ups may be moving away from this association after an SEC filing showed Reddit sold most of its crypto assets in September this year.
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Reddit Sells Off Nearly US $7m of Crypto
Earlier this year, Reddit went public – a decision that proved fruitful, with the company’s stock soaring 136% since the IPO.
At the time, Reddit revealed they held an “immaterial” amount of cryptocurrency, building a portfolio comprising mostly Bitcoin and Ethereum. Interestingly, they still haven’t revealed exactly how much their digital asset holdings are.
However, this foray into crypto was relatively short-lived, with the company reporting they had sold most of their crypto assets.
We sold the majority of our cryptocurrency portfolio, which consisted primarily of Bitcoin and Ether. The net carrying value of our cryptocurrencies, as well as the gain recognized on sale, was immaterial.
RedditAccording to the SEC filing, this “immaterial” – their legal team LOVES this choice of word – sale was worth nearly US $6.9 million (AU $10.50).
Unfortunately for Reddit, the timing of their sales wasn’t very effective, with Bitcoin almost immediately rocketing to its highest point in nearly six months.
Reddit Believes Crypto Has “Significant Potential” But is Wary of “Unique Risks”
The filing went on to discuss Reddit’s complicated relationship with crypto. The company still believes in the potential of digital assets, and still engages with several projects as part of its online platform.
We…continue to acquire Ether and Matic as a form of payment for sales of certain virtual goods…We also…hold digital assets…for use by our product and engineering teams.
RedditHowever, Reddit outlined the challenges that can come with holding crypto as a public company.
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The price of cryptocurrencies…have been and may continue to be highly volatile…Cryptocurrencies have no physical form and rely on blockchain and other technologies for their creation…This reliance subjects cryptocurrencies, cryptocurrency exchanges and other blockchain intermediaries to unique risks.
Reddit
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