NFT sales and pricing driven by luck, scarcity and optimism, according to studies

A trio of studies published in November may shine some light on the social and psychological factors that motivate movement in the nonfungible token (NFT) market. 

Across three independent studies, researchers from Western University in Canada, Tilburg University in the Netherlands, the University of North Carolina at Chapel Hill in the United States, and Rennes School of Business in France found that personal experiences and luck, along with asset scarcity and consumer optimism, were catalysts for the majority of market movement in the NFT space.

NFT market movement

In a study conducted by Guneet Kaur Nagpal of Western University and Luc Renneboog of Tilburg University titled “On Non-fungible Tokens, Blockchain Hypes, and the Creation of Scarcity,” the researchers analyzed the market dynamics of CryptoPunks, a popular collection of NFT assets.

“CryptoPunks,” write the researchers, “are among the most valued Non-Fungible Tokens (NFTs), with remarkable sales such as CP #5822 fetching USD 23.7 million in February 2022, and CP #7523 obtaining USD 11.8 million in December 2021.”

The primary findings, according to the paper, include the assessment that buyers who were already invested in Ether (ETH), the native coin of Ethereum — the blockchain on which CryptoPunks assets reside — were more likely to engage in the market at higher costs and also saw higher gains. The researchers also noted that ETH gains and losses didn’t necessarily affect the price of NFTs but did influence the decision to sell or resell assets.

Furthermore, the study states:

“The authors establish that the creation of rarity, for both CP types and accessory combinations, which can be captured by statistical and visual measures, determines pricing.”

In a separate study titled “Personal Experience Effects across Markets: Evidence from NFT and Cryptocurrency Investing,” researcher Chuyi Sun of the University of North Carolina at Chapel Hill examined transaction-level data from “about one million” wallets to study how…


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