Exploring the hedging performance of non-fungible token: Novel evidence from world uncertainty

Muhammad Umar, Meng Qin and Chi-Wei Su

Research in International Business and Finance, 2025, vol. 77, issue PA

Abstract: The study underscores the importance of global uncertainty in shaping a valuable non-fungible token (NFT) portfolio, linking the World Uncertainty Index (WUI) with the Non-Fungible Token Index (NFTI) through various methods to explore their relationship. Following the quantitative discussions, we discover that favourable and adverse effects exist of WUI on NFTI, which is not consistent with the inter-temporal capital asset pricing model. The favourable effects suggest that the non-fungible token market is considered a safe haven to hedge against uncertainty across the globe. However, the adverse impacts of WUI on NFTI cannot support this opinion, and the hedging performance of non-fungible tokens has almost disappeared in recent years. In turn, the favourable influences from NFTI to WUI underline that the former is viewed as a predictive indicator of the latter, indicating that the non-fungible token market might mirror the uncertainty worldwide.

Keywords: Non-fungible token; World uncertainty; Hedging performance; Time-dependant interrelationship (search for similar items in EconPapers)
JEL-codes: C32 E37 G12 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:77:y:2025:i:pa:s0275531925001874

DOI: 10.1016/j.ribaf.2025.102931

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