Reddit converts excess cash into Bitcoin and Ethereum

Social media giant Reddit has been using its excess cash to add small amounts of Bitcoin BTCUSD and Ether ETHUSD 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.

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.”

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

The firm said the Ether and MATIC 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.

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

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

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.

Magazine: Slumdog billionaire: Incredible rags-to-riches tale of Polygon’s Sandeep Nailwal