Table of Contents
1) Introduction
We all want to save money. Some of us want to retire early, while others aim to buy their ideal homes or luxury cars. However, in 2025, investing is not a simple task. People don’t want to include advisers and fund managers because they will get all our potential profits.
“It’s our bumpy road, but we’ll triple our money by sunrise.” — Some believe this, but it often leads to financial ruin. Investing is a slow game, and in 2025, when wars and global affairs come and go, there is no classic or working solution. You can’t just invest in cryptocurrencies (because most of them have no intrinsic value) or an ETF that follows the S&P 100 index (because the American customs duty war is on the rise).
In this landscape, domain names have surprisingly emerged as a compelling new form of investment. In this article, we will discuss how the domain names have evolved to their present form, and why some investors have already made bulk deals in domain name trading.
2) History of domain names
From an investment perspective, the history of domain names can be divided into three key phases. These all let us understand how domain names work and establish a more powerful and secure domain name system.
a) Early days of the internet
The internet officially started on January 1, 1983. At that time, the core principles of the domain name system (DNS) were created, but to the birth of the first commercial domain name, we had to jump two years in time. In the 80s, the domain name system had its potential, but it also had several weak spots. Security vulnerabilities and the lack of a central authority for managing domains were all drawbacks of early usage. Some experts completely questioned its relevance. However, more and more internet users stuck to it, which led to rapid growth and widespread popularity because of its easy-to-use and user-friendly interface.
b) The “dotcom” bubble
In the 90s, the DNS system was no longer just a romanticized online atmosphere; it was the industry standard. It was no longer just a space for government or academic use—it attracted the private sector as well.
The dotcom boom refers to a harmful activity, when investors were blind because of the shining fame of the DNS system and didn’t look behind the curtains. At that time, businessmen rushed to create their own websites, with the Top Level Domain of “.com”. And investors financed these decisions pleasantly. These were risky, irresponsible decisions, as often lacking any real understanding of the companies they funded.
At the start of the 21st Century, journalists spotted that most of these businesses had no intrinsic value, and didn’t even sell a single product in the past. Therefore, investors were scared and rushed to take their own lent money out from all these legal entities.
The end? Many bankrupt companies, some of them with great potential and innovative ideas. The DNS system, the “.com” domains, and the online atmosphere deceived the whole world and led societies to believe that everything that appears there will shine.
Despite the crash, this crash even empowered the domain name system and contributed to its long-term success.
c) The status of domain names in the 2020s
After the dotcom bubble, people realized that structured domain name trading needs to happen on the market. Therefore, various marketplaces gained some spotlight and became key figures of this market.
In the meantime, the DNS system became more secure because of the introduction of improved protocols and encryption standards. These two trends made online selling more popular than ever, which affected the number of registered domain names and their increasing values. From the end of the dotcom bubble to 2021, the number of domain names grew consistently over the long term, despite some short-term declines. While this trend slowed during the COVID-19 crisis, recent years have still shown steady growth in domain name registrations.
3) The domain name market in 2025
In 2025, the domain name market will be completely different from what we saw decades ago. The “.com” extension is still the most popular one, but not single-handedly. Innovative Top-level domains have come into the picture, like “.tech”, “.io”, or “.ai”, which sometimes even hide higher values than a simple “.com” domain.
The ccTLDS (country code top-level domains) have also become popular for SEO reasons. Nowadays, if a business only wants to serve a specific country’s buyers, a ccTLD can help the company to appear in search results more often.
Also, an emerging trend is that businesses are no longer afraid of buying their desired domain names. In 2023, OpenAI purchased Chat.com for $15.5 million just to direct this website to the main site of ChatGPT.com. That is the third biggest domain name purchase As of July 2025, it ranks as the third-largest domain name purchase.
4) How do domains become investments?
There are four reasons that distinguish a cheap domain name from an expensive one. In this part of the article, we will go through these four core elements.
a) Keyword relevance
If a domain name contains a popular keyword, that will make it more expensive. For example, “NFL.com” would be a very expensive domain name if it were available to buy. The NFL is one of the most-watched sports leagues in the world, and tens of thousands of people type this word into its search engine every day.
b) Length and memorability
Keyword relevance is not always enough. You can include a strong keyword in your 100 character long domain name, but it won’t get any attention. You need to understand that humans make searches with human-limited abilities. We struggle to remember long, meaningless strings of text, and that’s why it is less likely that long domain names, with weak memorability scores, are purchased for millions.
c) Market trends
If you want to invest in domains, following the market trends is essential. For instance, after the AI boom, “.ai” domain name extensions are on the rise, in terms of price as well. However, years ago, no one would make a bulk deal on a “.ai” domain name.
d) Extension
A domain name is the combination of the TLD (extension) and the SLD. Standalone, they don’t worth anything. That’s why we should not handle them as two separate parts. However, as an investment, focusing on and analysing the TLDs alone offers us numerous advantages. Each type of company grabs different types of TLDs nowadays, and if we can find out emerging ones that startups and innovative companies will focus on in the future, we can get great deals.
5) What are the cons of buying domains as investments?
Until now, this article has focused on the appeal of domain investments. On the other hand, we want to contribute to responsible decisions in the future. And responsible decisions can’t be taken without understanding the whole picture.
Domain name investment is on the rise, but it still has some weaknesses. Domain names are not liquid assets. They don’t function like stocks, which are traded on centralized exchanges that efficiently connect buyers and sellers. In the case of domain names, you never know when you will sell your product, tomorrow, next month, or after five years.
Also, in the stock market, if you find an undervalued stock, you can always buy and hold it, waiting for the increase. However, one domain name can belong to one legal entity, and even though you find many valuable ones, most of them are already reserved. It takes months of research to find out expiring domain names that have value in them, but other companies can also recognize this. And I don’t think that you have the resources to compete with Meta’s or Apple’s resources if they are eager to buy the same domain name.
6) Conclusion
In this article, we deep dived into domain investments and analysed the reasons why a simple domain name can be sold for millions. However, we also highlighted the negative aspects of domain name investment, which may make you consider taking part in this world. Whether or not you choose to invest now, domain names remain a market worth watching.
