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

In: Proceedings of the 11th International Conference on Emerging Challenges: Smart Business and Digital Economy 2023 (ICECH 2023)

Author

Listed:
  • Phi Dinh Hoang

    (Vietnam National University, Hanoi School of Business and Management)

  • Emmanuel L. C. VI M. Plan

    (Vietnam National University, Hanoi School of Business and Management)

  • Nguyen Thi Hang Nga

    (Vietnam National University, Hanoi School of Business and Management)

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.

Suggested Citation

  • Phi Dinh Hoang & Emmanuel L. C. VI M. Plan & Nguyen Thi Hang Nga, 2023. "Determinants of Non-Fungible Tokens Collection Market Activity in the Post-Pandemic Period," Advances in Economics, Business and Management Research, in: Nguyen Danh Nguyen & Pham Thi Thanh Hong (ed.), Proceedings of the 11th International Conference on Emerging Challenges: Smart Business and Digital Economy 2023 (ICECH 2023), pages 142-163, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-348-1_14
    DOI: 10.2991/978-94-6463-348-1_14
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