When scarcity backfires: Cyber scam impact on NFT market prices

While blockchain-based digital assets like Non-Fungible Tokens (NFTs) present new investment opportunities, their decentralized and largely unregulated nature leaves them vulnerable to cyber scams. This study exploits a natural experiment involving a major cyber scam on a blue-chip NFT collection and employs a difference-in-differences (DiD) design to identify its causal effects on NFT prices. We find that the attacked collection lost 42 % of its value relative to a matched control, with the rarest NFTs experiencing the largest declines. This pattern contradicts the traditional safe-haven view of rarity – the belief that scarce assets retain value during market stress – suggesting that high valuations and concentrated attention can make rare NFTs especially vulnerable when trust is compromised. Our findings extend data breach research to heterogeneous, non-fungible asset markets and challenge the safe-haven view of rarity, while also offering practical guidance for platform operators, market participants, and collection designers in managing rarity-based concentration risk.