In line with Michael Saylor’s MicroStrategy and Elon Musk’s Tesla, Reddit has also announced its plans to invest in cryptocurrency, signaling a tactical shift in its financial strategy.
The social media giant launched on February 22 archived for its initial public offering (IPO) with the U.S. Securities and Exchange Commission (SEC). As part of the filing, the social media company announced that:
“We have invested some of our excess cash reserves in Bitcoin and Ether.”
The story so far
According to the filing, Reddit has invested excess funds in Bitcoin [BTC] and ether [ETH] since 2022. As of December 31, 2023, Reddit only had Bitcoin and Ether in its treasury.
This was further evident from the file the company has also acquired Ether and Polygon [MATIC] as a form of payment for the sale of specific virtual goods and will continue this strategy in the future.
The company did not disclose the amount of cryptocurrency it holds, but added that the value of the assets was “intangible.”
Reddit said:
“The net book value of our cryptocurrencies, primarily Bitcoin and Ether, together with any associated cryptocurrency activities, was not considered material for the periods covered.”
The possible outcome
Reddit also expressed belief in the “significant potential” of blockchain-related technologies, although uncertainty remains regarding sustainable adoption by both businesses and consumers.
“The popularity and prevalence of cryptocurrencies is a relatively recent trend, and whether cryptocurrencies and blockchain technology will be adopted by consumers and businesses in the long term is uncertain.”
In conclusion, despite the company’s reported net losses of $90.8 million, news of its cryptocurrency holdings caused minor price shifts in Bitcoin, ether, and its DONUT token.
So it would be interesting to see how the companies’ experiment with blockchain technology would unfold.