The non-fungible token (NFT) market and its relationship with Bitcoin and Ethereum

9 Pages Posted: 8 Jun 2021

Date Written: June 6, 2021

Abstract

Non-fungible tokens (NFTs) are transferrable rights to digital assets, such as art, in-game items, collectables or music. The phenomenon and its markets have grown significantly since early 2021. We investigate the interrelationships between NFT sales, NFT users (unique active blockchain wallets), and the pricing of Bitcoin and Ether. Using daily data between January 2018 and April 2021, we show that a Bitcoin price shock triggers an increase in NFT sales. Also, Ether price shocks reduce the number of active NFT wallets. The results suggest that (larger) cryptocurrency markets affect the growth and development of the (smaller) NFT market, but there is no reverse effect.

Keywords: NFTs; non-fungible tokens; cryptocurrency

Suggested Citation

Ante, Lennart, The non-fungible token (NFT) market and its relationship with Bitcoin and Ethereum (June 6, 2021). Available at SSRN: https://ssrn.com/abstract=3861106 or http://dx.doi.org/10.2139/ssrn.3861106

Lennart Ante (Contact Author)

Blockchain Research Lab ( email )

Colonnaden 72
Hamburg, 22303
Germany

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