A US Dollar Crash will give US-based Registrars Huge Advantage

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By , September 15, 2010

I have been monitoring this situation for literally as long as I’ve been in the domain name business, which is nearly 15 years. easyDNS, based in Canada,¬† does nearly half of all it’s revenues in US dollars. In the early days of the company, the USD was worth upwards of 1.35 to 1.45 Canadian. We made piles of money on the exchange, and because we weren’t a margin player, the relatively small amount we were paying back to the registries in USD didn’t really bother us.

Of course that began to seriously change to the point where we really started noticing it after 2003, 2004 area. The Canadian loonie has even hit past parity a couple times, and believe me when that happens, we feel it!

We’re basically in the same position as “exporters” to the US, we pull in revenues in USD, but we incur expenses up here in CDN. So when the USD is weak, it reflects in our revenues.

I look at things in an extremely long-term perspective, so much so, that I often look crazy. When I placed a bet with my former accountant circa 2004 that the Canadian dollar would hit parity within 5 years, I think those were his exact words “You’re crazy”. I wish I could find a usenet discussion board I said the same on back in the early 00’s, where I was also assured¬† by the resident pundits that the Canadian loonie would never, ever rise higher than .75.

So here we are today, where a loonie in the .95 to parity range is the new normal and we’ve been actively executing our strategy for protecting against a weak USD for several years.

That strategy included:

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