I wrote about this topic earlier this month and was glad to find out that The Sherpas covered it as well today. It’s an interesting discussion and I encourage you to read my post as well as watch the video.
Today, I’d like to make two clarifications.
On the show, Rick mentioned that we cannot talk about a numeric domain bubble because numerics have gradually risen in value.
Have numerics gradually risen in value?
Yes, I agree with Rick on this one.
However, does this mean there is no numeric domain bubble?
This is where I start to disagree.
You see, gold and silver for example have also gradually risen in value over a period of many years but that didn’t stop this asset class from entering bubble territory 25-ish years ago.
Let’s refer to gold first since it’s more of an investment than silver (silver is also an investment but it has more of an industrial element to it than gold).
Before the bubble started, back in the late seventies, the price was in the $200-ish zone. Over a very short period, the price skyrocketed to $800+ (today’s price is nominally higher but if you adjust it for inflation, we *still* haven’t surpassed the high I’m referring to now) but it collapsed just as quickly.
Something similar but even more pronounced happened to silver.
In the late seventies, the price used to be in the $5 zone.
It then quickly skyrocketed all the way to $50 but then just as quickly collapsed back to the $5 area. In silver’s case, it collapsed to back where it stared whereas in gold’s case, it collapsed as well but was still at a higher value than back before the bubble started.
These are just two examples but I’m sure you understand the point I’m trying to get across.
I agree with Rick, numeric domain prices have indeed risen gradually but that doesn’t mean they cannot enter bubble territory.
During the show, I learned something interesting (and this brings me to the second clarification I’d like to make), the fact that even six number dot coms are desirable nowadays. I knew that this was the case for 5 number dot coms but was surprised to find out that there is even demand for 6 number dot coms. As mentioned in my first post, I can definitely understand the value of NNN dot coms and I can kinda-sorta understand NNNN dot coms as well.
But 5 numbers and now 6?
In my opinion, the fact that even such domains are considered desirable at this point represents the #1 argument in favor of the fact that we are in a bubble.
Again, I’m not saying you should sell.
I’m not saying you should buy either.
I’m simply trying to explain that at this point, we are in a numeric domain bubble in my opinion and I therefore consider any approach that disregards this situation fundamentally flawed.