IPv4 address block prices continue to fall
IPv4 assets desondanks nog voldoende onderpand voor bedrijfsleningen
IPv4 assets desondanks nog voldoende onderpand voor bedrijfsleningen
IPv4 address block prices continue to fall. Having been roughly 35 dollars per address a year ago, the going rate has dropped towards the 30-dollar mark. For the biggest address blocks, the price drop has been quite dramatic: from nearly 50 dollars per address for a /16 block a year ago to little more than 20 dollars now. So those blocks have lost more than half their value in the space of a year.
IPv4 assets nevertheless appear to retain sufficient value to be acceptable as collateral for corporate loans.
The ongoing decline in IPv4 address prices is revealed by the sales figures published by online marketplace IPv4.Global. According to that platform, record numbers of addresses are available to purchase and to lease.
Figure 1: Average prices per address for IPv4 address blocks. [Source: IPv4.Global]
Although IPv4.Global talks about a very active buyers’ market and points to the pivoting economy as the cause, it’s debatable whether IPv4 address blocks do in fact remain a good investment. When prices began to dip from 2022, we asked whether we were past peak IPv4. We argued that, as the adoption of IPv6 slowly but surely continued and the importance of IPv4 declined, there must come a point where the value of IPv4 addresses goes into irreversible decline. As the following graph shows, prices have been going down consistently since 2022.
Figure 2: Prices of IPv4 addresses have been in structural decline since 2022. [Source: IPv4.Global]
The going rate for /16 and larger blocks is now back to its 2020 level. At that time, we observed that Amazon had 100 million IPv4 addresses worth no less than 2.5 billion dollars.
Figure 3: The going rate for /16 and larger blocks is now back to its 2020 level. [Source: IPv4.Global]
In 2020, Vincentas Grinius, CEO of London-based hosting provider Heficed, predicted that the price of an IPv4 address would double in the next five years. However, he also warned that the window for exploiting that value would be limited. Grinius envisaged the value of IPv4 addresses peaking within 10 years, and then starting to fall. The market has since followed the path he predicted, but considerably more quickly.
Despite IPv4 address blocks slowly declining in value over the last few years, IPv4.Global is apparently still happy to accept them as collateral for corporate loans as large as 100 million dollars. According to The Register, IPv4.Global recently made its first IPv4-secured loan to the owners of a data centre that wanted to expand its cloud offering. If the borrower is unable to repay the loan on time, IPv4.Global will be entitled to sell the pledged address blocks (on its own platform, needless to say).
The product offered by IPv4.Global is therefore similar to the IPv4-backed securities issued by Cogent last year. Using that vehicle, the US internet service provider was able to raise 200 million dollars, repayable over five years. However, with address prices in structural decline, it remains to be seen how much longer such constructions will remain viable.