Price Dynamics of Non-Fungible Tokens: The Case of the Digital Arts Market

Abstract

While the traditional art market stagnates, the digital art market is booming partially due to its connection with non-fungible tokens, which allow any unique goods to be mapped in a digital environment. Using unique individual data from the online art NFTs marketplace SuperRare, we combine econometric tools with recent machine learning approaches. This approach allows us to define explanatory variables out of the NFTs descriptions for our Hedonic pricing approach. Using these variables, we are able to show that our Hedonic pricing models exhibit relevant informational value for NFTs prices. Moreover, we show that NFTs cannot be viewed as a simple derivative of cryptocurrencies.