 Does utilizing smart contracts induce a financial connectedness between Ethereum and non-fungible tokens?Samet Gunay and Kerem Kaskaloglu Research in International Business and Finance, 2022, vol. 63, issue C Abstract: The majority of NFTs utilize the Ethereum blockchain platform to facilitate smart contracts. In this paper, we execute various econometric analyses to determine if this technical dependence induces a financial linkage to the risk, return, and prices of assets. For robustness, we also test the same relation between Bitcoin and NFTs. Empirical analyses are conducted through SADF bubbles test, DCC-GARCH time-varying correlation analysis, Bootstrap causality tests and spillover analysis. According to the results of various price, return, and volatility analyses, we find that NFTs do not demonstrate idiosyncratic features in their price developments and thus they cannot be considered as a separate asset class. Additionally, NFTs do not possess a specific financial linkage with Ethereum from using its infrastructure. Finally, we suggest NFT investors use alternative financial instruments, rather than Ether and Bitcoin in portfolio diversification, due to the presence of significant time-varying relationships and interactions. Keywords: NFTs; Smart contracts; Ethereum; Bitcoin (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:63:y:2022:i:c:s0275531922001593 DOI: 10.1016/j.ribaf.2022.101773 Access Statistics for this article Research in International Business and Finance is currently edited by T. Lagoarde Segot More articles in Research in International Business and Finance from Elsevier |
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