Investor Experience Matters: Evidence from Generative Art Collections on the Blockchain
55 Pages Posted: 4 Mar 2022
Date Written: February 24, 2022
In the market for non-fungible tokens on the blockchain, experienced investors systematically outperform inexperienced investors. Controlling for holding period, experienced investors make 10 percentage points more per trade. NFT collections purchased by experienced investors sell out more often and more quickly in primary markets, and experience higher price growth in secondary markets. Our results suggest that NFT markets are characterized by high degrees of informational inefficiency, allowing investors with informational advantages to systematically extract profits.
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