Social media network Reddit sold the majority of its cryptocurrency holdings in the third quarter of 2024, according to a recent filing with the Securities and Exchange Commission (SEC).
The bulk of the sales came from holdings in Bitcoin (BTC) and Ether (ETH) government bonds. The 10th quarter SEC filing revealed that the net value of the crypto assets and the gain recognized from the sale were deemed immaterial in the period.
“During the three months ended September 30, 2024, we sold a significant portion of our cryptocurrency portfolio, consisting primarily of Bitcoin and Ether. was not significant in the period presented.”
Proceeds from the sale of cryptocurrencies were valued at $6.869 million in the three months ended September 30, according to the document.
The company previously invested some of its excess cash reserves in Bitcoin and Ether. It also continued to acquire ETH and Polygon tokens MATIC (now known as POL) as a “form of payment for the sale of certain virtual goods.”
Reddit's Consolidated Statement of Cash Flows (in thousands). Source: SEC
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Reddit said that ETH and MATIC sales were “not material to the year ended December 31, 2023 or the nine months ended September 30, 2024.” The social media company also held digital assets for limited use by product and engineering teams.
Since 2022, Reddit has used surplus funds to add small amounts of cryptocurrencies to its treasury. In its previous initial public offering (IPO) filing, the company praised the “huge potential” of cryptocurrencies and blockchain.
According to Reddit's policy, investments in digital assets for treasury purposes are limited to BTC, ETH, and other cryptocurrencies that U.S. regulators have identified as “likely not securities” through public statements or guidance. be done.
Downturn in virtual currency advertising
The filing also revealed that Reddit has seen a decline in ad demand since the pandemic, citing concerns about the global economy, rising interest rates and uncertainty in the geopolitical landscape.
“Since the three months ended December 31, 2022, we have experienced declines in ad spending in certain sectors facing macro challenges, particularly technology, media and entertainment, and cryptocurrencies.”
The company said the decline in advertising from these areas was partially offset by diversification across “other advertising areas.”
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