Have you ever wondered why Chinese investors have turned to buying domain names? Over the past couple of years, we've seen the market for two-letter .com, three-letter .com, four-letter .com, two-number .com, three-number.com, four-number .com, and five-number .com heating up with prices steadily rising.
Every week there are reports of rare two-letter and three-number .COM domains being sold to China, with leading domain investor George Kirikos estimating that 19.4% of all two-letter .COM domains are owned by companies or investors in China.
What has brought about this surge in acquisitions? I asked the team at DN.com if they could help us answer this question. DN.com is an international domain name escrow platform, who are also affiliates of the popular Chinese marketplace 4.CN. 4.CN's parent company are listed on the WhoIs information for many of the most valuable domains in existence.
The first question I asked was, "What has changed in recent years that made domain names a desirable investment asset?"
DN.com told us:
This summer the Chinese stock market crashed, with markets nosediving 8.5% on 24th August. According to some analysts, around 1 in 30 people in China owns stocks of some kind, accounting for 20% of a household's wealth.
As DN.com said above, this uncertainty in the stock market has seen many investors withdrawing their money and placing their faith in domain names.
In recent weeks, we have seen a vast number of four-letter .COM sales, most fetching well over $1,000 and there have been questions - especially in threads on the NamePros forums - about how these domains are being used, and whether Chinese investors will look to sell to other investors or end users as markets rise.
DN.com told us:
This comment is referring to the registration of numerical, four-letter, and letter-number combination domains in various TLDs. For example, at the end of October there was a report here on NamePros by @djum stating that all English Premium LLLL.net domains have now been registered - with 5,020 being registered in one day.
DN.com's beliefs regarding investments based upon the rarity and uniqueness of domain names are backed up by the fact that two- to four- letter .COM's and two- to six- number .COM's have risen quickly in value, with domains including patterns and repeating characters being considered more valuable.
A data website I use is LLLLsales.com to track recent four-letter .COM sales. Their charts show a continuing upward trend in four-letter Chinese premium .COM, but how long will that trend last? Will Chinese investors still be investing in domains in five or ten years time?
DN.com have these comments to make:
Thanks to @Eric Lyon and DN.com for helping with the creation of this article.
Every week there are reports of rare two-letter and three-number .COM domains being sold to China, with leading domain investor George Kirikos estimating that 19.4% of all two-letter .COM domains are owned by companies or investors in China.
What has brought about this surge in acquisitions? I asked the team at DN.com if they could help us answer this question. DN.com is an international domain name escrow platform, who are also affiliates of the popular Chinese marketplace 4.CN. 4.CN's parent company are listed on the WhoIs information for many of the most valuable domains in existence.
The first question I asked was, "What has changed in recent years that made domain names a desirable investment asset?"
DN.com told us:
Everything has changed. The overall economy is much more advanced. Plus the fluctuation of the stock market caused many people to withdraw their funds from the market. They are re-investing those funds into new areas, like domain names.
Since the quantity of premium names are limited, and demand has risen, it has driven the price to a new level. We still are amazed, everything seems to be unreasonable, yet it is still going on.
Since the quantity of premium names are limited, and demand has risen, it has driven the price to a new level. We still are amazed, everything seems to be unreasonable, yet it is still going on.
This summer the Chinese stock market crashed, with markets nosediving 8.5% on 24th August. According to some analysts, around 1 in 30 people in China owns stocks of some kind, accounting for 20% of a household's wealth.
As DN.com said above, this uncertainty in the stock market has seen many investors withdrawing their money and placing their faith in domain names.
In recent weeks, we have seen a vast number of four-letter .COM sales, most fetching well over $1,000 and there have been questions - especially in threads on the NamePros forums - about how these domains are being used, and whether Chinese investors will look to sell to other investors or end users as markets rise.
DN.com told us:
I believe that only a few are targeting end-users. The IT industry has entered into a new phase, the capital market has become more and more level-headed, hence the start-ups. Even long existing IT companies are influenced by the change. I believe that most investors are investing because of the rarity and uniqueness of domain names.
Recently, a bunch of Chinese investors registered thousands of names over one night, to be honest, I don't understand the reason why.
Recently, a bunch of Chinese investors registered thousands of names over one night, to be honest, I don't understand the reason why.
This comment is referring to the registration of numerical, four-letter, and letter-number combination domains in various TLDs. For example, at the end of October there was a report here on NamePros by @djum stating that all English Premium LLLL.net domains have now been registered - with 5,020 being registered in one day.
DN.com's beliefs regarding investments based upon the rarity and uniqueness of domain names are backed up by the fact that two- to four- letter .COM's and two- to six- number .COM's have risen quickly in value, with domains including patterns and repeating characters being considered more valuable.
A data website I use is LLLLsales.com to track recent four-letter .COM sales. Their charts show a continuing upward trend in four-letter Chinese premium .COM, but how long will that trend last? Will Chinese investors still be investing in domains in five or ten years time?
DN.com have these comments to make:
It's hard to say, no one knows the future. From our point of view, as the value of CNY continues to decrease, people will tend to invest those funds into something that would maintain the value, i.e. gold, real estate, and to some, domain names. So I believe that investors will still be buying in the coming 2 years.
Thanks to @Eric Lyon and DN.com for helping with the creation of this article.
Last edited:
