According to a report by Cointelegraph, in three independent studies released in November, researchers found that “personal experience, luck, asset scarcity, and consumer optimism” were catalysts for most market trends in the NFT space.
NFT scarcity creates an impact on individual NFT pricing
In a study titled “Evaluating Digital Art: On Non-Fungible Tokens (NFTs), Blockchain Speculation, and the Creation of Scarcity” conducted by Guneet Kaur Nagpal from the University of Western Ontario in Canada and Luc Renneboog from Tilburg University in the Netherlands, researchers analyzed the market dynamics of popular NFT series CryptoPunks.
The researchers wrote:
According to the paper, key findings include the assessment that buyers who have invested in Ether (ETH) are more likely to participate in the market at higher costs and 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:
The impact of investors’ personal experience on the crypto market
In another study titled “Cross-Market Effects of Personal Experience: Evidence from NFT and Cryptocurrency Investments,” Chuyi Sun, a researcher from the University of North Carolina at Chapel Hill, analyzed transaction-level data from “approximately one million” wallets to examine how “personal experience” affects investor behavior and causal impact on market booms/busts.
Sun stated:
Sun added that these experiences also impact the cryptocurrency market, as investors who randomly acquire more valuable NFTs are more likely to purchase cryptocurrencies with “lottery-like features,” and “personal experiences and the influx of new investors also contribute to the formation of the NFT market bubble.”
Counterintuitive research findings
Akanksha Jalan and Roman Matkovskyy from Rennes School of Business in France conducted another study titled “The Impact of Experience, Overconfidence, and Optimism on Future Cryptocurrency Ownership,” which delved into the dynamics surrounding investor optimism and their chain reactions to the cryptocurrency and NFT markets.
In this study, researchers found results contrary to expectations: past negative experiences and investor optimism have a positive impact on the probability of future ownership of cryptocurrencies and NFTs.
