Exploring market dynamics: Analyzing the correlation between non-fungible tokens, Bitcoin, Ethereum growth rates, and NASDAQ performance

Abstract

This study provides a comprehensive analysis of the growth rates and correlations among non-fungible tokens (NFTs), Bitcoin (BTC), Ethereum (ETH), and the NASDAQ Composite Index from 2018 to 2021. Utilizing data from Statista, CoinMarketCap, and Yahoo Finance, this study examines annual growth rates, standard deviations, and Pearson correlation coefficients to understand the dynamics of these diverse markets. The findings reveal significant volatility in the NFT and cryptocurrency markets, with NFTs experiencing an unprecedented growth rate of 5.552 percent from 2018 to 2019, followed by stabilization. In contrast, BTC and ETH exhibit notable fluctuations, reflecting the speculative nature of cryptocurrencies. The NASDAQ Index, representing traditional financial markets, displayed more consistent growth and lower volatility (Nath, 2020). These results suggest a complex interplay between the digital and traditional asset classes (Ante, 2022). This study highlights the importance of understanding market volatility and correlation patterns for investors and policymakers and emphasizes the need for adaptive investment strategies and regulatory frameworks in the evolving landscape of digital assets. Future research should focus on the causal factors influencing these market dynamics and the role of investor behavior in shaping market trends.