Reddit Explores Crypto and Blockchain, Storing Bitcoin and Ether with Surplus Funds
Summary:
Reddit has been investing in Bitcoin and Ether using its surplus cash since 2022, according to recent filings. The documents, part of an initial public offering submission, also reveal the company's engagement with blockchain technology and experimentation with cryptocurrencies Ether and Polygon as payment methods for certain virtual goods. Despite incurring a net loss of $90.8 million in 2023, the platform experienced a 20.6% revenue increase. The future of crypto and blockchain adoption remains uncertain, although Reddit sees significant potential in these technologies.
Recent filings unveiled that Reddit, the popular social media platform, has been investing in Bitcoin (BTC) and Ether (ETH) with its surplus funds since 2022, demonstrating its faith in the tremendous potential of cryptocurrencies and blockchain technologies. In a document submitted to the U.S. Securities and Exchange Commission as part of a February 22 initial public offering, the company revealed that it has been investing its extra liquidity in these digital assets. Reddit confirmed that as of December 31, 2023, the only crypto assets it possessed were Bitcoin and Ether, but the invested amounts were considered insignificant.
From the company's perspective, the value of these crypto holdings and any associated crypto activities were insubstantial in the mentioned periods. Additionally, Reddit revealed that it has been testing blockchain technology, making purchases in Ether and Polygon (MATIC) for certain virtual product sales. The company characterized the Ether and Polygon received as trivial during 2022 and 2023, but suggested that these cryptos might still feature as future payment methods.
An unspecified amount of cryptocurrencies are also held by Reddit's product and engineering team for designated applications, as per their disclosure. As per Reddit's statements, they believe in the substantial potential of blockchain technologies, despite the uncertainty surrounding its lasting acceptance by businesses and consumers.
Significant revelations from the S-1 registration document indicated that the company incurred a net loss of $90.8 million in 2023, while nonetheless witnessing a 20.6% rise in revenue to $804 million year-on-year. Despite being valued at $10 billion following a 2021 funding round, recent projections from a Bloomberg report on January 28 suggest the company may now only achieve half of that valuation.
Reddit reportedly ended its blockchain rewards initiative, "Community Points," in October. The program rewarded users with points for their positive interactions in certain community threads. Scalability issues were cited as the primary cause for discontinuing the service.
Published At
2/23/2024 3:01:17 AM
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