Reddit exits Bitcoin and Ethereum investments despite BTC nearing peak

Key Takeaways

• Reddit sold its Bitcoin and Ethereum holdings in Q3 2023 before the latest price surge.
• The company's new investment policy limits cryptocurrency assets and requires board approval.

Reddit, the social media giant, has significantly reduced its crypto holdings, according to an SEC filing released yesterday.

Reddit sold off most of its Bitcoin and Ethereum during the third quarter, shedding its assets just before Bitcoin’s recent surge in October.

This week, Bitcoin hit a high of $73,569, coming just $168 short of its all-time peak of $73,737. However, Reddit decided to liquidate its crypto holdings when Bitcoin was trading between $54,000 and $68,000.

Initially acquired as “excess cash” investments, these crypto assets were described by Reddit as “immaterial,” and the proceeds from their sale followed the same characterization.

Yet Reddit’s historical crypto engagement has been anything but minor.

From its early adoption of community tokens like Moons, to the addition of Polygon-based Collectible Avatars, Reddit was among the first to integrate blockchain for user engagement.

However, as of recent months, Reddit appears to be pulling back from these initiatives.

The shift comes as Reddit’s investment policy now requires board approval for any future crypto purchases, with limitations set to Bitcoin, Ethereum, or assets deemed unlikely to be classified as securities.

The filing also revealed a decline in advertising revenue from several key sectors, including technology, media, entertainment, and cryptocurrency, attributed to economic uncertainty, rising interest rates, and geopolitical factors.

In February, Reddit reported holding ‘immaterial’ amounts of Bitcoin and Ether, sourced from excess cash reserves, alongside Ether and MATIC acquired for virtual goods.