As a seasoned researcher with a keen interest in the intersection of technology and finance, I find Reddit’s decision to offload most of its cryptocurrency portfolio intriguing. Having closely followed the crypto market dynamics over the years, it is evident that Reddit capitalized on the Bitcoin and Ether rally during the third quarter, pocketing a tidy sum of $6.9 million.
Reddit, a significant player in the social media world, largely sold off its digital currency assets during the third part of the year. The monetary worth and the profit gained from selling its Bitcoin and Ether were considered insignificant or negligible by the company.
Based on a recent report submitted to the U.S. Securities and Exchange Commission (SEC), the company pocketed roughly $6.9 million by offloading its Bitcoin (BTC) and Ethereum (ETH) stocks during the three-month period ending September 30th. This sale took place when BTC was trading at approximately $65,000.
Since then, the value of the cryptocurrency has experienced a substantial surge, currently being traded at around $72,300. In contrast, Ether remains close to its late-September level, hovering just over the $2,600 threshold.
Reddit disclosed that it utilized a portion of its surplus funds to purchase Bitcoin (BTC) and Ethereum (ETH), and continues to receive Ether and Matic as payment for the sales of digital goods, presumably referring to Non-Fungible Tokens (NFTs) sold on their platform.
According to the company, Ether and Matic earnings from sales were insignificant for the year ending December 31, 2023, or the nine months ending September 30, 2024. Additionally, it obtained and keeps digital currencies utilized by its development and technical departments, with these resources allocated only for specific purposes.
The information provided indicates that they had liquidated their holdings of Bitcoin (BTC) and Ethereum (ETH), leaving only Matic, which was acquired through NFT transactions. Furthermore, their investment strategy necessitates the approval of the board of directors before making any future investments in cryptocurrencies.
The filing adds:
As an analyst, I’d approach our treasury investments in cryptocurrencies by focusing on assets that regulatory bodies like the SEC and CFTC, or their senior staff, have indicated, either publicly or through guidance, are unlikely to be classified as securities. This currently includes Bitcoin, Ether, and any other cryptocurrency that falls into this category.
A significant portion of Reddit’s most prominent groups are related to cryptocurrencies, with r/CryptoCurrency and r/Bitcoin among their biggest forums. These digital currency communities have contributed significantly to the growth of the cryptocurrency community, and were key arenas for discussions during the debate over block size.
Initially, the company introduced community tokens such as Moons within the r/CryptoCurrency subreddit to acknowledge and compensate user participation. However, they eventually discontinued their support for these tokens. In 2021, they also began offering non-interchangeable token avatars as a new feature.
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2024-10-31 20:05