After what seems to have been the longest bear market in IPv4 History, we are starting to see signs of life again. Aside from February of this year, 2023 has shown positive IPv4 demand trends with no signs of extreme volatility. Most noticeably, the last 3 months have demonstrated a much more stable demand trend. Let’s dive into demand trends and then determine how it will affect the remainder of 2023.
This year’s average IPv4 transfer requests are respectable at around 140 requests per month. This has been slowly catching up to the previous three-year average of 163. In April IP transfer requests were 135 compared to May transfer requests of 143, showing an increase of +6%. While that number alone doesn’t seem impressive, what we need to consider is that last year the month-to-month demand trends had double-digit volatility. While the last 3 months have had single digits, which shows positive signs of stability.
While this data may indicate the bulls are coming, the market pricing has been taking a bit of a turn. IPv4 prices have decreased and even started selling in the mid $30’s price range for small to mid-sized IPv4 subnets from a limited number of suppliers. This can be heavily attributed to a continuous surplus of demand, inflation, higher interest rates, and less borrowing power, which is causing suppliers to feel frantic and offload IPv4 addresses in an effort to generate much-needed cash. On the other hand, /16s are still commanding a higher dollar amount due to their scarcity, the type of buyers, and their available budgets.
Regardless of the IPv4 block size or region, it is important to remember that this is still a unique market with no more assets in production. Therefore, there will likely come a time when the pendulum swings once again, and IPv4 addresses become scarce and more expensive.
It seems as if large, mid-sized, and smaller internet service providers, hosting companies, cloud operators and related over purchased IPv4 in 2020. This was likely due to the unknown timeline of COVID, short-term increased demands, and the quickly rising prices of scarce IPv4 address space. Therefore, now instead of the normal yearly and bi-yearly purchase cycles, they are likely looking at skipping a year and purchasing every 2 years. If that is to be the trend, then we are likely to see a large increase in IPv4 price and demand starting in 2024.
In closing, if your company will need more IP addresses in the next 12 – 24 months and you have the budget, this is a great time to buy IPv4. Prices are down 20% – 30% and supply is abundant. If you have been in this industry long enough, we are sure you can remember that normally not only do prices increase, but supply is also not readily available when you need it. Just some food for thought…