The NFT Hype: What Draws Attention to Non-Fungible Tokens?

Christian Pinto-Gutiérrez, Sandra Gaitán, Diego Jaramillo and Simón Velasquez
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Christian Pinto-Gutiérrez: Faculty of Business and Economics, Universidad de Talca, Talca 3460000, Chile
Sandra Gaitán: Center for Research in Economics and Finance (CIEF), School of Economics and Finance, Universidad EAFIT, Medellin 050022, Colombia
Diego Jaramillo: Center for Research in Economics and Finance (CIEF), School of Economics and Finance, Universidad EAFIT, Medellin 050022, Colombia
Simón Velasquez: Center for Research in Economics and Finance (CIEF), School of Economics and Finance, Universidad EAFIT, Medellin 050022, Colombia

Mathematics, 2022, vol. 10, issue 3, 1-13

Abstract: Non-fungible tokens (NFTs) can be used to represent ownership of digital art or any other unique digital item where ownership is recorded in smart contracts on a blockchain. NFTs have recently received enormous attention from both cryptocurrency investors and the media. We examine why NFTs have gotten so much attention. Using vector autoregressive models, we show that Bitcoin returns significantly predict next week’s NFT growth in popularity, measured by Google search queries. Moreover, wavelet coherence analysis suggests that Bitcoin and Ether returns are significant drivers of next week’s attention to NFTs. These results indicate that the remarkable increases in prices of major cryptocurrencies can explain the hype around NFTs.

Keywords: NFT; non-fungible tokens; investor attention; cryptocurrency (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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