Reddit, which had liquidated all its Bitcoin and Ethereum during the market surge, is now joining the S&P 500, the index that lists the 500 largest publicly traded companies in the United States. The community platform replaces AvalonBay Communities, a real estate investment trust absorbed by a competitor. At that time, Reddit was valued at over $30 billion, well above the size and profitability criteria required by the index.
The announcement came on August 13: S&P Dow Jones Indices confirmed that Reddit would take the place of AvalonBay Communities, which was swallowed by its competitor Equity Residential in a merger nearing completion. The change, effective before the opening on Tuesday, is thus less about Reddit's spectacular performance and more about the absorption of another member of the index.
The market did not shy away from the news. Indeed, the stock jumped by 11% following the announcement, according to CNBC. Mechanically, all index funds and ETFs that replicate the S&P 500 must now buy RDDT in proportion to its weight in the index, a purely structural demand, unrelated to the company's quarterly results.
Reddit itself did not miss the opportunity to celebrate the event.
"We are proud to join the S&P 500, a recognition of the growth, momentum, and consistency we have established as a publicly traded company," said Drew Vollero, Reddit's CFO, in the statement accompanying the announcement. This serves as a reminder that entering the index remains, despite its mechanical trigger, a symbolic milestone for a company that went public just over two years ago.
Reddit is not reinventing the wheel. In May 2025, Coinbase became the first purely crypto company to join the S&P 500, with a stock price increase of nearly 20% in the month of its entry. At Bernstein, analysts estimated the mechanical buying pressure generated by passive funds at around $16 billion.
However, Reddit has taken the opposite path in the crypto space. The platform had launched its own community tokens, MOONS for r/CryptoCurrency and BRICKS for r/FortNiteBR, as early as 2020, initially on Ethereum and then migrated to Arbitrum starting in 2021, with the transition completed in 2022. The program was shut down in October 2023, hampered by scalability costs and a hostile regulatory climate. Its treasury in Bitcoin and Ethereum, built around its IPO, was also fully liquidated for approximately $6.87 million.
Reddit no longer has a single crypto line on its balance sheet. And yet, it is now caught up in the same market mechanism that propelled Coinbase last year, without a single token needing to appear on its accounts for that to happen. The irony is complete: the company that renounced its on-chain economy finds itself caught in the same passive flow mechanism as that which, at Coinbase, had precisely made the opposite bet.
Reddit had indeed made crypto a prominent aspect of its IPO in 2024, before gradually renouncing it. The stock now joins the exclusive club of the 500 largest U.S. market capitalizations without any direct link to the ecosystem it courted two years ago. The future will now be determined by the same indicators as any S&P 500 stock: margins, growth, and passive flows.
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