Determinants of Non-Fungible Tokens Collection Market Activity in the Post-Pandemic Period

DOI

10.2991/978-94-6463-348-1_14How to use a DOI?

Keywords

Non-fungible Tokens; Ethereum Market; NFTs investors behaviors

Abstract

Purpose

As an emerging technological and financial asset, non-fungible tokens (NFT) have yet to be completely understood and, owing to bubble-like behavior along with pandemic effects, literature has mostly focused on pricing mechanisms and spillover effects between cryptocurrency and NFTs. This work aims to determine the significant determinants of trading activity in NFT collections quantified by the number of transactions as a means to characterize NFTs investors behaviours.

Design/methodology/approach

NFTs collection-week data from the Ethereum blockchain were scraped. Together with collection-specific features, we employ factor analysis and rich regression estimation to identify the factors that are significantly correlated to trading activity.

Findings

Our results, consistent across the different models and methodologies, indicate that the historical transaction and pricing as well as Ethereum market activity are the important determinants of NFTs trading activity. Certain collection-specific properties also show significant relationship with NFTs trading activities, such as age, size, creators commision, collection attention, and utility.

Research limitations/implications

Our work calls for more studies to fully understand the effect of wash trades and on NFT market activity.

Practical implications

Our results give recommendations to NFT investors and can guide them in performing sensible investment decisions at the level of selecting potential liquid and valuable collections. Given NFTs trading activity closely associate with NFTs market liquidity, understanding the determinants of NFTs trading provide important implications for preventing market failure.

Copyright

© 2023 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Phi Dinh Hoang
AU  - Emmanuel L. C. VI M. Plan
AU  - Nguyen Thi Hang Nga
PY  - 2024
DA  - 2024/02/05
TI  - Determinants of Non-Fungible Tokens Collection Market Activity in the Post-Pandemic Period
BT  - Proceedings of the 11th International Conference on Emerging Challenges: Smart Business and Digital Economy 2023 (ICECH 2023)
PB  - Atlantis Press
SP  - 142
EP  - 163
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-348-1_14
DO  - 10.2991/978-94-6463-348-1_14
ID  - Hoang2024
ER  -