• A structural scarcity of IPv4 addresses has shifted these technical resources into economically significant territory for operators and investors.
• Structural barriers such as liquidity limits, policy constraints and ambiguous ownership suppress potential value, raising debate about how to unlock fair asset recognition.
Scarcity, Value and the Historic Moment
In the early internet, IP addresses were abundant and allocated freely through the Internet Assigned Numbers Authority (IANA) and the regional Internet registries (RIRs). But the finite nature of the Internet Protocol version 4 (IPv4) address space — limited to roughly 4.3 billion addresses — means that almost all usable addresses have long since been exhausted. As of today, few unallocated IPv4 blocks remain available from organisations such as RIPE NCC, ARIN, and APNIC, because these free pools were depleted years ago. This depletion has created a persistent scarcity in the market.
That scarcity is the focus of Lu Heng’s reflection on “why this ‘IP is capital’ moment matters”, written in December 2025. He argues that IPv4 addresses are
“one of the most undervalued assets in the global digital economy,”
and that their suppressed valuation has direct implications for the wealth and competitiveness of internet service providers (ISPs) and infrastructure companies.
The basic economic principle is straightforward:
“IPv4 is a finite resource. With a 32-bit space, fewer than 4.3 billion addresses exist, and barely over 3 billion are actually usable.”
This structural scarcity has fostered a market where the value of addresses can be tens of dollars each — significantly higher than in the early decades of the internet.
Also Read: IPv4 scarcity and its economic impact on ISPs
Also Read: Why IPv4 could be worth $60 trillion: Evaluating the debate over digital asset value
Structural Barriers to Asset Recognition
Despite the rising prices and the essential role of IPv4 in connectivity, several constraints hold back the market from evolving into a fully fledged capital asset class.
First, market liquidity remains extremely low relative to the potential total. According to Lu Heng, although the total value of IPv4 resources may be in the hundreds of billions today,
“annual transfer volume is under $2 billion”,
reflecting less than 1 % turnover relative to total stock. This low liquidity makes price discovery difficult and hinders investors from treating IPv4 like a conventional capital market instrument.
Second, policy restrictions imposed by RIRs create friction. Many registries require documented “need” before approving IPv4 transfers, a legacy practice designed for an era of free address allocation but one that complicates trading today. These mandated holding periods and extra verifications can suppress trading activity, which in turn depresses price signals that would otherwise reflect true market value.
Third is the persistent ambiguity around ownership rights. RIR policies generally treat addresses as resources allocated under contract rather than privately owned property with unrestricted resale rights. Without clear, globally accepted ownership frameworks, these resources cannot fully behave like conventional assets such as spectrum licences or real estate.
This combination of scarcity and structural constraint has given rise to a market where IPv4 resources command economic attention without fitting easily into existing investment categories.
Market Dynamics and Future Considerations
The scarcity-driven economic value of IPv4 is evident in secondary markets where addresses are bought, sold, and leased. Industry sources show that global prices have increased significantly over the past decade, partly because of lingering IPv4 dependence even as IPv6 adoption continues slowly. Enterprises often must maintain IPv4 connectivity for legacy systems, compatibility and wide-area network reachability.
However, ambitious valuations — even those suggesting trillions in potential asset value — remain controversial because of the structural barriers noted above. Critics point out that treating IPv4 as tradable capital without addressing policy and ownership uncertainties may create distorted markets with speculative behaviour rather than stable economic utility.
The broader lesson is that digital infrastructure — even technical identifiers often taken for granted — can evolve into economically significant resources. But for IPv4 or similar digital assets to be treated fairly in capital markets, governance frameworks, legal regimes and financial mechanisms may need corresponding evolution.
