Pricing Dynamics and Herding Behavior of NFTsFridgen, Gilbert ; Kräussl, Roman ; Papageorgiou, Orestis et alE-print/Working paper (2023) Non-fungible tokens (NFTs) took the digital art space by storm in 2021, generating massive amounts of volume and attracting a large number of users to a previously obscure part of blockchain technology ... [more ▼] Non-fungible tokens (NFTs) took the digital art space by storm in 2021, generating massive amounts of volume and attracting a large number of users to a previously obscure part of blockchain technology. Still, very little is known about the determinants that contribute to NFT pricing and the market dynamics. This paper attempts to evaluate these factors analyzing 860,067 art NFTs that have been deployed on the Ethereum blockchain and have been involved in 317,950 sales. We introduce a first-of-its-kind ranking system for NFT artists, adding a novel dimension to our analysis. Our results suggest that market liquidity and intrinsic value strongly predict average price of NFTs. Contrarily, social media activity surprisingly shows a negative association with NFT prices. We also uncover the dominance of a small group of artists, demonstrating the pronounced 'superstar effect' and herding behavior within the NFT market. This market dynamic, however, shows signs of shifting towards independent decision-making during extreme market volatility. [less ▲] Detailed reference viewed: 162 (12 UL) Non-Fungible Tokens (NFTs): A Review of Pricing Determinants, Applications and OpportunitiesKräussl, Roman ; Tugnetti, Alessandro ![]() E-print/Working paper (2022) This paper provides a review of the development of the non-fungible tokens (NFTs) market, with a particular focus on its pricing determinants, its current applications, and its future opportunities. We ... [more ▼] This paper provides a review of the development of the non-fungible tokens (NFTs) market, with a particular focus on its pricing determinants, its current applications, and its future opportunities. We investigate the current state of the NFT markets and highlight the perception and expectations of investors towards these products. We summarize and compare the financial and econometric models that have been used in the literature for the pricing of non-fungible tokens with a special focus on their predictive performance. We design a framework that can help to understand the price formation of NFTs. We further aim to shed light on the value creating determinants of NFTs in order to better understand investors’ behavior on the blockchain. [less ▲] Detailed reference viewed: 294 (33 UL) |
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