Anatomizing the Returns of Non-Fungible Tokens: Evidence From the CryptoPunks

14 Pages Posted: 20 May 2022

See all articles by Jying-Nan Wang

Jying-Nan Wang

College of Management, Yuan Ze University

Yen-Hsien Lee

Chung Yuan Christian University

Hung-Chun Liu

Chung Yuan Christian University - Department of Finance

Yuan-Teng Hsu

Shanghai Business School

Date Written: March 8, 2022

Abstract

We use transaction data on CryptoPunks to anatomize the factors affecting the returns of non-fungible tokens (NFTs). Our results show that trading volume in the short period before a trader buys (sells) CryptoPunk relates negatively (positively) to the returns on NFTs, suggesting that when market trading volume is at a high level, NFT owners are better off on the sell side, and investors interested in NFTs should avoid joining the herd. Turnover of a token tends to harm its returns. Finally, both traders’ willingness to purchase and trading experience have a positive impact on NFT returns within short-term investment horizons.

Keywords: CryptoPunks; NFTs; Non-fungible tokens; COVID-19; Ethereum

JEL Classification: C14; C22; G14; G15

Suggested Citation

Wang, Jying-Nan and Lee, Yen-Hsien and Liu, Hung-Chun and Hsu, Yuan-Teng, Anatomizing the Returns of Non-Fungible Tokens: Evidence From the CryptoPunks (March 8, 2022). Available at SSRN: https://ssrn.com/abstract=4105500 or http://dx.doi.org/10.2139/ssrn.4105500

Jying-Nan Wang

College of Management, Yuan Ze University ( email )

135, Far-East Rd., Chung-Li
Taoyuan, ROC
Taiwan

Yen-Hsien Lee

Chung Yuan Christian University ( email )

22 Pu-Jen, Pu-chung Li
Chung-Li, 32023
Taiwan

Hung-Chun Liu

Chung Yuan Christian University - Department of Finance

200 Chung Pei Rd
Chung Li City, 32023
Taiwan

Yuan-Teng Hsu (Contact Author)

Shanghai Business School ( email )

Shanghai
China

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