In a surprising move, Reddit announced a significant sale of its Bitcoin and Ethereum holdings in the third quarter of 2024, saying in an SEC filing that the financial impact would be minimal. This significant crypto withdrawal comes as Reddit reconsiders the Treasury Department’s approach amid a challenging economic environment.
Reddit sells most of its crypto holdings in Q3
Social media network Reddit liquidated most of its crypto assets in the third quarter of 2024, according to a recent filing with the Securities and Exchange Commission (SEC).
Government-owned Bitcoin and Ether were the main sources of sales. According to its 10th quarter SEC filing, the overall value of its cryptocurrency holdings and the profits it received from its sales were believed to be negligible during that 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.”
Generate $6.869 million in quarterly sales
According to the report, $6.869 million was generated from the sale of cryptocurrencies in the quarter ending September 30th.
Some of the company’s surplus funds were previously invested in Bitcoin and Ether. The company went on to acquire ETH and MATIC, a Polygon (now called POL) token, as a “form of payment for the sale of certain virtual goods.”
Reddit said ETH and MATIC sales were “not material for the year ended December 31, 2023 or the nine months ended September 30, 2024.” The social media company also had limited storage of digital assets for use by its technical and product teams.
Reddit’s policy regarding digital asset investment
Since 2022, Reddit has been replenishing its crypto reserves with small amounts from surplus Cointelegraph stock. In its previous IPO filing, the company praised the “huge potential” of cryptocurrencies and blockchain.
According to Reddit’s policy, for financial reasons, digital assets are limited to Bitcoin, Ethereum, and other cryptocurrencies that U.S. regulators have publicly stated or directed are “likely not to be securities.” You can invest.
Decrease in advertising demand associated with economic uncertainty
Reddit’s advertising demand has declined since the outbreak, due to global economic uncertainty, rising interest rates and geopolitical unpredictability, according to the filing.
“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.”
Company officials claim that diversification into “other advertising areas” is helping to cushion the impact of declining ad revenue in some industries.
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