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