Q1 liquid domain report shows huge drop in value for 3L .COMs

Every quarter Ivan Rasskazov and Giuseppe Graziano put together a report of the liquid domain name market. Note the word liquid which is critical to understand since this report does not cover the entire domain industry but instead focuses on a specific category of domain.

So what is a liquid domain? This report focuses on the following categories of liquid domain names:

  • LL .COMs
  • 3L .COMs
  • 4L .COMs
  • NN .COMs
  • 3N .COMs
  • 4N .COMs
  • 5N .COMs
  • CC .COMs

These categories are considered liquid because investors can look at market values for names in these categories, i.e. someone can look and say, ah a 5N .COM is currently selling for X on average, and find a buyer in and around that price.

Generic words like Cool.com are without a doubt incredibly valuable (and very liquid) domain names, but have much more variability in pricing. Many amazing one and two-word .COMs that have plenty of value aren’t tracked in the same way that domains in the category above are. Liquid domains, as listed above can be tracked just like stocks in a stock market and in China they really are considered a true asset class with values based on the organization of letters and numbers in short .COM domain names.

In the latest report it was interesting to see a small decline in 4L and 5N names (~8%) and a huge drop for Chinese Premium 3L .COMs which lost 50% of their value, yikes! This shows the incredibly variability and unpredictability of the market which is still incredibly nascent and in many ways still being created and defined.

Between countries the US and China are by far the most dominant when it comes to actively buying and selling liquid domains like these. If you want to dive more into the data yourself you can download the report here. Domain Sherpa also has a great interview with the creators of the report which you can watch here.

Now here’s the question. How long are we going to continue to see massive volatility and price swings (like a 50% change) in the liquid domain market until things even out? Or will they always be this erratic? Comment and let your voice be heard!

 

{ 5 comments… add one }

  • Dn Ebook May 10, 2017, 12:35 am

    Seems that quality 5N’s with a repeating pattern are actually going up, hard to say with the rest. Although I am seeing some pattern based 6n’s getting decent prices

    Reply
  • Graham Haynes May 10, 2017, 2:25 am

    it’s 50% from peak but a 3% rise in last quarter

    Reply
  • Jijo Pappachan May 10, 2017, 6:54 am

    Hi Morgan

    Was there a mistake?

    I see 3L.coms are up 3.31%

    A 50% value drop can’t happen.

    Jijo

    Reply
    • Morgan May 11, 2017, 9:37 pm

      @Jijo – the 50% drop was with Chinese premium 3L .COMs

      Reply
  • Ivan Rasskazov May 10, 2017, 7:17 pm

    Hello Everyone,

    Morgan thank you for the post. The 50% decline is from the peak. It is still a very substantial number and worthy of analysis.

    Jijo, an asset can drop in value up to 100% at any given time. Generally this can happen when the asset becomes illiquid, however, such occurrences are not common. 2008 was an example were certain types of financial assets became illiquid, but this was because a substantial global financial shock took place. The good thing about domains is that they are relatively cost effective to renew, compared to making a mortgage or keeping a home’s real estate taxes paid. Unless you borrow money to finance purchases, a domain investor should be able to ride out market shocks for the long run.

    Regards,

    Ivan Rasskazov

    Reply

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