Don't miss out on NFTs?! A sentiment-based analysis of the early NFT market

Florian Horky, Lili Dubbick, Franziska Rhein and Jarko Fidrmuc

International Review of Economics & Finance, 2023, vol. 88, issue C, 799-814

Abstract: This study investigates the impact of Twitter sentiment on the Non-Fungible Token (NFT) market. Using a dataset of over 5 million English-language tweets on NFTs, we calculate a daily sentiment index and link it to NFT sales and trading volume. Applying wavelet analysis and DCC-GJR-GARCH models, we analyze the NFT market, characterized by multiple bubbles and high volatility. The findings reveal Twitter's significance as a primary source of information for a broad audience. Moreover, the study contributes to the literature by examining the role of Twitter sentiment in the NFT market's development. Additionally, the study indicates weak links between established cryptocurrencies and the NFT market. Based on our findings, we recommend that traders and policymakers use social media activities to monitor new digital markets.

Keywords: NFTs; Digital finance; Crypto markets; Sentiments; Social media activity (search for similar items in EconPapers)
JEL-codes: C58 G15 G41 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:88:y:2023:i:c:p:799-814

DOI: 10.1016/j.iref.2023.07.016

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