In Q3 2024, Reddit liquidated most of its reserves held in Bitcoin and Ethereum, amounting to approximately $6.9 million, according to the company’s SEC filing.

Details from the Filing

“During the three months ended September 30, 2024, we sold the majority of our cryptocurrency portfolio, including Bitcoin and Ethereum. The net book value and profit from the sale were immaterial for the reporting periods,” Reddit disclosed.

The digital assets were previously used for treasury management purposes, with Reddit investing surplus cash in Bitcoin and Ethereum. The company also received small amounts of Ethereum and POL (formerly MATIC) from NFT sales.

Additionally, Reddit retains some digital assets to support its engineering and product teams.

Risks and Regulations

Reddit emphasized that its investments are limited to cryptocurrencies that are not currently classified as securities under regulatory standards. However, the company acknowledged the potential for future reclassification.

The filing highlighted several risks associated with cryptocurrencies, including:

Price volatility.
Security threats.
Potential obsolescence of technologies.
The unique challenges of US accounting standards that amplify the impact of crypto value fluctuations in financial statements.

Reddit also expressed concerns about the uncertain tax framework for cryptocurrencies in the United States.

Context and Market Trends

In contrast, MicroStrategy continues to accumulate Bitcoin, increasing its corporate reserves to 252,220 BTC (worth ~$18.2 billion). The company plans to raise an additional $42 billion for further acquisitions.