There was a time when 4L .COMs were selling in the $2,000 – $4,000 range, back then it really felt like the sky was limit and that these domains really were becoming a meaningful asset class. I wrote an article on the future of 4L .COMs back in 2016 and well, sitting here four years later I think we all know what the future held, and it hasn’t been great for 4L .COM investors.
An interesting thread has started recently on NamePros talking about this, started by Igor Mironyuk who has been a long-time reader of my blog. He kicked things off by posing the question: why are 4L .COMs so cheap now?
RJ had a really solid reply to this question that I thought you’d all enjoy as well:
They are cheap because there are 456,976 of them and not enough demand to raise the current price.
I’m glad you called them cheap, because I also think 4-letter .coms (4LC) are undervalued. They are liquid assets, which is pretty much the holy grail achievement of dominating. Even a $100 liquidation value for non-premium four-letter combinations is not insignificant, because having a reliable liquidation value means the assets can be used as store-of-value, a currency, collateral, or type of security. If a big investor enters the market, the wholesale liquidation value will assuredly go up.
456k might sound like a lot, but it really isn’t. Consider the similarity to Bitcoin that also has a limited supply of 20 million BTC. There will never be more than that. At a $150 valuation for any combination, that is only a theoretical $69 million dollar market cap (1/4 of Dogecoin’s) A wealthy investment group could easily swallow the entire aftermarket of 4LCs at this point and the prices would rise accordingly.
Chinese domain investors poured a lot of money into buying 4LC a few years ago and achieved a $1000 liquid value for domains that met their criteria. Any domain that didn’t contain a vowel or the letter V was valued at minimum $1000, and were called “CHiPs” (Chinese premium domains.) This type of $1000 valuation could happen again for all 4LC if investors around the world caught onto the concept of buying these domains as assets.
This is not investment advice of any kind, just my own personal opinion of the market.(Source – NamePros)
I agree with RJ here, but I’m not buying any more 4L .COMs for now, still I think this is an interesting category to watch as it could spring back to life in the future. But who knows? What do you think?