Domain investing remains attractive even amid the volatility of digital assets

The past few years have seen the digital asset market experience wild highs and shocking lows. Back in 2021, the guarantees of Web 3 and the meta-world and possibilities of blockchain were an obsession in the technology sphere, and the excitement was reflected in the world of finance. The idea of ​​transforming the Internet from the bottom up was tempting. Like the promise of creating wealth by getting in on the ground floor (or at least the first floor) of a latest type of investment. Add in pandemic lockdowns and life happening almost entirely online, and you have a recipe for NFT mania.

Of course, it didn’t last. Since the market peak in 2021, some NFTs have held their value and proven to be excellent long-term investments, but many more have change into almost worthless. This is evidenced by the fate of Open Sea, an NFT Marketplace launched in 2017. In 2022, Open Sea was valued at a whopping $13 billion. However, at the end of last 12 months 2023, NFT Marketplace investors estimated its value just $1.4 billion90% discount.

In the ever-expanding digital economy, selecting the next big thing will be difficult. And the truth is, it will not be vital. While the rise of Web 3, NFTs, and the first season of Tiger King received all the attention, domain investing held its own as a viable and profitable investment strategy in the digital landscape. In fact, demand for premium domains is growing, and some of the largest domain sales in history occurred during the same period in which NFTs shone brightly and then faded into the background.

Why is investing in domains still profitable?

Domain investing first emerged in the mid-Nineteen Nineties, and since then domain values ​​have generally increased over time, while NFTs appear to have done the opposite. Here are some reasons:

• Domain names have utility: Domain names are for practical purposes. They offer brands an online home, and in today’s world, businesses need an online presence. This means there’ll all the time be a need for domains, in addition to a growing need for premium and ultra-premium domains that empower businesses and make access easier for their users.

• Domains have tangible value: Unlike most NFTs, domains have a tangible, real value that is tied to the domain’s relevancy and recognition. That’s why premium domains corresponding to single English words, category-defining domains, or memorable phrases provide a particularly exciting investment opportunity.

• Investing in domains has a relatively low barrier to entry: Because domain investing has a relatively low barrier to entry in comparison with many other investment opportunities, it is a viable option for many people. Domain investing has costs and risks that mustn’t be underestimated, but because it is not as closed as many investment sectors, there is constant innovation and creativity in this area.

It’s essential to notice here that when I talk about domain investing, I’m not talking about cybersquatting. Squatting involves purchasing domains containing trademarked names in the hope of forcing corporations to pay more for them than the exchange rate, which is illegal. Domain investors, on the other hand, buy promising, branded domains that are not obviously related to your current business.

One of the aspects that makes domain investing so interesting is the way naming conventions evolve. For example, as consumers have change into more brand and technology conscious and serps and search engine optimisation strategies have evolved, trends have moved away from keyword-based domains toward more branding options corresponding to creative spelling (Lyft.com), abstract single words ( Slack.com) and compound words (Instagram.com).

What will the future of domain investing seem like?

With this in mind, what’s next for domain investing? Looking ahead, it seems likely that the increased demand for premium domains that has been obvious to domain sellers over the last few years will proceed. Brands wish to stand out from the competition and be remembered, and founders and CEOs are increasingly recognizing the right domain as a tangible asset, making premium a good choice.

At Squadhelp, we have helped 1000’s of business owners of all sorts find names and domains, and our clients have repeatedly told us that they’ve come up with some great names themselves, but cannot find a domain that is an exact or partial match. This is why we mix naming with domain purchases, and why I consider it will soon change into the norm for many people.

Ultimately, the combination of name selection and domain purchase should result in greater awareness of premium domain markets, pushing domain investors toward increasingly sophisticated marketing.

These changes come at a perfect time, as AI sales and marketing tools change into increasingly legacy. At the same time, advanced marketplace search functionality enables buyers to search out industry-specific domains and increases the value and profitability of area of interest domains. In fact, without delay, over 60% of buyers who search for specific keywords on Squadhelp purchase domains that do not contain those keywords. This signifies that entrepreneurs are looking for metaphors or indirect connections to their industry inside their brand and domain, which is able to greatly facilitate intelligent search that actually understands buyer intent.

Final thoughts

The combination of utility and brand recognition that domains provide has kept their value stable for two many years, and there is no sign that the market will decelerate any time soon. Currently, NFTs could also be branded, but they lack utility.

This may change in the future as blockchain technology becomes part of our lives. In the late Nineteen Nineties, it was not possible to predict how fundamentally the Internet would change our world, including the way we do business and build brands. However, until there is a fundamental change in the way blockchain technology impacts our day by day lives, domains will remain the best digital assets available.