Chinese Investment and the Changing of the Domain Asset Landscape

Chinese Investment and the Changing of the Domain Asset Landscape

Hey Investors, I hope you are enjoying the bountiful domain market. In the last month we have seen substantial growth in all of the short, liquid domain markets. 3L’s have gone up 33-50%, 4L’s have grown from 200-500%. Numeric domain assets are performing at all time highs with unprecedented growth across the board. So what is driving this growth? It is the Chinese market. With the relaxation on restricting foreign investments and the yuan becoming devalued (and the devaluation is expected to continue) in the recent Chinese market collapse our friends across the Pacific are looking to do one thing. Protect their money by converting them into assets that are backed by the US dollar.

This is where the domain name industry comes in and especially the short, liquid .com segment of the market. Domain names are like virtual real estate and in real estate the adage is location, location, location. The default TLD (Top Level Domain) or extension since the creation of the internet has always been .com. This will never change. Of course there are new TLD’s coming out every week but there are specialized TLD’s and have limited value. The good land (.com) is already taken and more of it cannot be created. For example there are 676 combinations for two letter .com domain names. No one is going to create a new dictionary letter so the supply is limited but the demand continues to rise.

When a company like Facebook purchases FB.com then it is removed from the market and thus the supply goes down, driving up demand. This is why short, liquid domains have inherent value. Until recently, the goal of domain investing was to purchase a domain name and then hope that an end user would desire the name that you own at which time you would charge a large sum and make a strong profit. Now we are seeing domain assets being treated as financial instruments. The end user is being taken out of the game.

Back to the Chinese market. Because the Chinese need to move large sums of money into commodities that are traded in US dollars they have found a nice partner in the domain world. The regulations aren’t strict and the assets are in short supply ensuring that they will hold their value. The Chinese investor can hold their domain asset for awhile and then withdraw cash when needed by selling their asset to the next investor who has a need to protect their finances. What is scary is that the domain name investment concept has yet to hit the mainstream in China. When it does you can expect sustained growth for an extended period of time.

We are still in the beginning stages of a domain name gold rush and opportunity abounds. Look for area’s where you find scare resources and you will find high demand. No longer concern yourself with finding end users (which is causing quite a bit of legal hassles in the domain name community) and consider yourself a property investor.
If you would like some more information please contact us a contact@qlq.com. We can help with investment strategy as well as education around this market segment. We have helped many make serious money, you can be one of them.

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Jason Mcardle

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Jason McArdle is a highly successful businessman, from owning his own real estate business to being a multi-million dollar producer for AT&T to now being a well known domain broker and trader, he has well over a decade of success across multiple markets. He is now dedicated full time to his post as President of Sales at QLQ, designing winning sales strategies in today’s domain marketplace by taking a consultative approach to brokering. He believes that an educated investor is a good business partner, therefore taking time to write about the domain market and educate those in the market, he believes, is paramount to his company’s success.

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