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The fundamental value of art NFTs

Author

Listed:
  • Fridgen, Gilbert
  • Kräussl, Roman
  • Papageorgiou, Orestis
  • Tugnetti, Alessandro

Abstract

This paper examines the level of speculation associated with art non-fungible tokens (NFTs), comprehends the characteristics that confer value on them and designs a profitable trading strategy based on our findings. We analyze 860,067 art NFTs that have been deployed on the Ethereum blockchain and have been involved in 317,950 sales using machine learning methods to forecast the probability of sale, the trade frequency and the average price. We find that NFTs are highly speculative assets and that their price and recurrence of sale are heavily determined by the floor and the last sales prices, independent of any fundamental value.

Suggested Citation

  • Fridgen, Gilbert & Kräussl, Roman & Papageorgiou, Orestis & Tugnetti, Alessandro, 2023. "The fundamental value of art NFTs," CFS Working Paper Series 709, Center for Financial Studies (CFS).
    • Handle: RePEc:zbw:cfswop:709
    DOI: 10.2139/ssrn.4337173
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    References listed on IDEAS

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    More about this item

    Keywords

    Non-fungible tokens (NFTs); Machine Learning; Fundamental Value; Speculation; Ethereum; Blockchain; Non-fungible tokens (NFTs);
    All these keywords.

    JEL classification:

    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature

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