Anatomizing the Returns of Non-Fungible Tokens: Evidence From the CryptoPunks
14 Pages Posted: 20 May 2022
Date Written: March 8, 2022
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: Suggested Citation