Impact of Crypto Art Sentiment on Art Valuation

Abstract

This paper examines the impact of sentiment on the value of Non-Fungible Tokens (NFTs) in the cryptocurrency market. Non-fungible tokens (NFTs) have gained significant attention in recent years as a new form of digital art investment. However, there is limited research available on the relationship between NFT sentiment and art value. In this paper, we sought to address this gap by using OpenSea, the largest NFT marketplace, and VADER (Valence Aware Dictionary and Sentiment Reasoner), a sentiment analysis tool, to gather and analyze NFT sentiments. The OpenSea API was utilized to extract over one million NFT transactions. The data collected included information such as NFT asset name, description, date of transaction, and transaction price. After the data was extracted, it was ingested into a data storage system for analysis. The NFT sentiment was then analyzed using the VADER sentiment analysis tool, which uses a lexicon of words to determine the sentiment polarity of a given text. Before analyzing the sentiment, the data was preprocessed to remove any irrelevant information and to ensure that the data was in a consistent format. This involved cleaning the data to remove any duplicates, outliers, and missing values. The results indicate that most artists tend to use neutral words when describing their art, but the average price of NFTs with negative sentiment is higher than those with positive sentiment. This paper contributes to a better understanding of the factors that influence NFT value and offers a valuable resource for those interested in NFT investment such as digital artists, digital art collectors, blockchain-based companies, or anyone with basic knowledge in blockchain and non-fungible token. The paper approach is unique in terms of topic, problem-solving and the count data used in the experiment. The impact of digital art sentiment on art value is not only examined in this paper, but it opens the way for future research.