According to a report by Cointelegraph, researchers found in three independent studies released in November that “personal experience, luck, asset scarcity, and consumer optimism” are catalysts for most market trends in the NFT sector.
NFT scarcity creates an impact on individual NFT pricing
Investors’ personal experiences influence the crypto market
Counterintuitive research findings
In a study titled “Valuing Digital Art: On Non-Fungible Tokens (NFTs), Blockchain Hype, and the Creation of Scarcity” conducted by Guneet Kaur Nagpal from the University of Western Ontario in Canada and Luc Renneboog from Tilburg University in the Netherlands, researchers analyzed the market dynamics of the popular NFT series CryptoPunks.
Researchers stated:
According to the paper, the main research findings include assessing that buyers who have invested in Ether (ETH) are more likely to participate in the market at a higher cost and also earn higher returns. Researchers also pointed out that the fluctuations in Ether do not necessarily affect the price of NFTs, but do affect the decision to sell or resell assets.
Additionally, the study also noted:
Investors’ personal experiences influence the crypto market
In another study titled “Cross-Market Impact of Individual Experiences: Evidence from NFT and Cryptocurrency Investments,” researcher Chuyi Sun from the University of North Carolina at Chapel Hill analyzed transaction data from “about a million” wallets to examine how “personal experiences” affect investor behavior and the causal impact on market booms/busts.
Sun stated:
Sun also added that these experiences also impact the cryptocurrency market, as investors who randomly acquire more valuable NFTs are more likely to buy “lottery-like” cryptocurrencies, and “personal experiences and the influx of new investors also contribute to the formation of the NFT market bubble.”
Counterintuitive research findings
Akanksha Jalan and Roman Matkovskyy from Rennes School of Business in France conducted another study titled “The Impact of Experience, Overconfidence, and Optimism on Future Cryptocurrency Ownership,” which delved into the dynamics surrounding investors’ optimism and their chain reactions in the cryptocurrency and NFT markets.
In this study, researchers found results contrary to expectations: past negative experiences and investors’ optimism both have a positive impact on the probability of owning cryptocurrencies and NFTs in the future.