Price determinants of non-fungible tokens in the digital art market

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.

Automated summary

While the traditional art market stagnates, the digital art market is thriving thanks to its connection with non-fungible tokens. By combining econometric tools with machine learning approaches and utilizing unique individual data from the online art NFTs marketplace, SuperRare, we are able to define explanatory variables for our Hedonic pricing approach. Our findings demonstrate the informational value of our Hedonic pricing models for NFT prices and refute the notion that NFTs are simply derivatives of cryptocurrencies.