According to a report on Tuesday, Reddit sold the majority of its crypto portfolio during the third quarter, selling off Bitcoin and Ethereum that it previously held for “financial purposes.” filing Work with the Securities and Exchange Commission (SEC).
When the social media company filed for an initial public offering in February, it held an “immaterial” amount of cryptocurrencies on its balance sheet and purchased digital assets. surplus cash. On Tuesday, Reddit used the same language to explain the proceeds from recent sales.
“We have sold a large portion of our crypto portfolio, primarily consisting of Bitcoin and Ether,” Reddit said. “The net book value of our virtual currencies was immaterial, as was the gain recognized upon the sale.”
The amount of the cryptocurrency sale remains unclear, but given the period of the sale, which will take place during the quarter ending September 30, Reddit will have missed out on recent gains in Bitcoin, the market's largest cryptocurrency. .
Bitcoin on Tuesday was $175 off its all-time high of $73,737 set in March, hitting a monthly high of $73,562 in a month dubbed the “Uptober” by traders for the cryptocurrency's historic rally. reached. Between July and September, when Reddit sold its assets, the price of Bitcoin ranged from approximately $54,000 to $68,000.
The company has turned away from Bitcoin and Ethereum to shore up its balance sheet, but Reddit suggested it still holds some crypto assets. For that, Ethereum polygon It originates from the sale of virtual avatars that exist on the Ethereum scaling network. Reddit said it was retaining MATIC, while Polygon recently began the process. Migrating tokens It has changed to something new called POL.
Among social media giants, Reddit was an early pioneer, experimenting with digital assets as a way to offer collectibles and reward user engagement. The company indicated that its product and engineering teams are still working on cryptography to some degree, but also noted that questions abound over the future of digital assets.
“While we believe that cryptocurrencies and blockchain technology have great potential, the popularity and adoption of cryptocurrencies is a relatively recent trend, and we believe that cryptocurrencies and blockchain technology have a long-term impact on consumers and It's unclear whether it will continue to be adopted by companies,” Reddit said.
Reddit's stock price rose 41% on Wednesday, reaching $116 per share at press time. Beating analysts' expectations, Reddit turned profitable, with net income of $30 million, compared to a loss of $7.4 million in the year-ago period.
When asked what the dollar value, or “immaterial” amount, of the company's crypto portfolio is, he replied: reddit did not immediately respond to a request for comment from decryption.
The social media company first entered the crypto space in 2020 and has since distanced itself from several crypto-related projects. Moons was once a crypto token of Reddit's r/crypto community, but after Reddit it became a community-driven project.officially abandoned“We took control of the smart contract associated with the token in November last year.
In July, the company moved further away from the digital assertion space. sunset The so-called Collectible Expressions feature displayed animations based on users' Collectible Avatars NFTs created on Polygon. After its release in 2022, the collectible avatar became an early hit, sometimes selling for thousands of dollars on the secondary market.
Reddit has released collectible avatars multiple times. 18 million pieces minted As of July 2023. Social media companies also leveraged social media as a way to promote their events.sell them For example, it was done last year as a way to attract fans for the upcoming NFL season.
Under Reddit's investment policy, the company said that future investments in cryptocurrencies will require board approval. Additionally, the allocation will be limited to Bitcoin and Ethereum, or other cryptocurrencies identified as “likely not securities.”
To this day, Reddit's mobile app features a cryptocurrency wallet. The company, called Vault, initially described its product as “part of its next vision.”new frontier” But going forward, it appears Reddit is setting boundaries on its balance sheet.
Edited by Andrew Hayward
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