Reddit, the self-proclaimed “front page of the internet,” has made a splash in the web3 world by revealing they’ve been quietly accumulating Bitcoin (BTC) and Ethereum (ETH) since 2022.
This news unveiled in their recent IPO filing, sent shockwaves through the crypto community and sparked discussions about the future of both Reddit and the broader industry.
While the amount of invested cash remains undisclosed and classified as “immaterial” in the filing, the move speaks volumes.
By allocating a portion of their treasury to leading cryptocurrencies, Reddit signals their belief in the long-term potential of blockchain technology and digital assets.
The move comes at a time when Reddit is preparing for its initial public offering (IPO), aiming to offer a unique opportunity for its user base to participate directly in the company’s future growth.
Reddit’s IPO and user participation Reddit has announced plans to allow its most active users, including some moderators, the chance to purchase shares directly.
While potentially increasing the market price volatility of its Class A common stock, this strategy shows the company’s commitment to its community-driven ethos.
According to the filing, Reddit had $804 million in sales in 2023, a figure much higher than the previous year. The company also reported having 52 million daily active users and 100,000 active communities as of December 2023.
Reddit expects to begin trading on the New York Stock Exchange under the ticker symbol “RDDT” in March 2024.
The approach also highlights the platform’s innovative spirit, reminiscent of the meme stock craze of 2021 led by its WallStreetBets chat room, which saw users rally around stocks like GameStop and AMC Entertainment.
However, the company cautions that this could lead to increased risk for other investors due to potential market fluctuations.
Reddit’s blockchain experimentation into blockchain and cryptocurrency is not without its challenges. Before its IPO filing, the company had experimented with blockchain-based Community Points, rewarding contributors with tokens on the Ethereum and later Algorand chains.
Despite the vibrancy of its cryptocurrency-focused communities, Reddit decided to discontinue the Community Points system in October, ahead of its public listing.
This decision was influenced by a changing regulatory landscape and the complexities involved in managing a blockchain-based rewards system.
Despite stepping back from its Community Points program, Reddit’s investment in Bitcoin and Ethereum signals a strategic bet on the future of digital currencies.
Also, since the firm is holding cryptocurrencies and experimenting with blockchain, Reddit is positioning itself at the intersection of social media and the emerging digital economy.
