The economic value of NFT: Evidence from a portfolio analysis using mean–variance framework

Ko, Hyungjin; Son, Bumho; Lee, Yunyoung; Jang, Huisu; Lee, Jaewook

doi:10.1016/j.frl.2022.102784

Cited by 71 publications

(35 citation statements)

References 22 publications

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“…For example, Pinto‐Gutiérrez et al (2022) showed that expected Bitcoin and Ethereum returns significantly influence the attention buyers paid to NFTs. Ko et al (2022) proved, that NFTC can be part of a diversified portfolio, since their prices are not correlated to traditional investment assets. Kapoor et al (2022) looked at the impact of social media activities on NFTC value and found projects with social media support achieved a significant increase in prices.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

“…The functionalities of NFTC are wide‐ranging. Viewed as an investment, they can be used both for a utilitarian purpose (retirement provision, portfolio diversification) and as an emotional one (as a form of gambling and thrill‐seeking) (Belk et al, 2022; Ko et al, 2022). If NFTC are bought as an art object, the function is the attachment to the motif, the artist, or art in general (Vasan et al, 2022).…”

Section: Hypotheses and Model Developmentmentioning

confidence: 99%

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Determinants of the purchase intention of non‐fungible token collectibles

Fortagne,

Lis

2023

J of Consumer Behaviour

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Disrupting the concept of ownership in the digital space, non‐fungible tokens (NFTs) have created unprecedented market opportunities and captivated millions of investors. Characterized by artificial scarcity and ensured authenticity, the technical implementation establishes novel parameters for digital ownership and collecting, underscoring a research gap where the determinants of consumer behavior are yet to be studied. This paper presents a research model based on the Stimulus‐Organism‐Response (SOR) model to investigate consumers' purchase intention of NFT‐based collectibles (NFTC) for the first time. To develop our model, we identified distinctive NFTC features (functionality, scarcity, aesthetics, and price value) and blockchain characteristics (security and privacy) affecting the utilitarian and hedonic attitude towards NFTC and finally shape NFTC purchase intention. For empirical validation, we conducted an online survey among an NFT‐interested target group (N = 356) and analyzed the results by structural equation modeling with SPSS Amos. Findings indicate that the utilitarian attitude toward NFTC is affected by perceived functionality and price value from the product side, and perceived blockchain security and privacy from the technology side. The hedonistic attitude toward NFTC is shaped by perceived functionality, scarcity, and aesthetics. Both attitudes, utilitarian and hedonistic, demonstrate a significant impact on purchase intention. A subsequent mediation analysis confirms that NFTC and blockchain characteristics have an indirect effect on purchase intention. In the under‐investigated interface of blockchain technology, digital ownership, and consumer behavior, this work enriches the digital ownership discourse by demonstrating how NFTC create consumer value through product and technology features.

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Section: Theoretical Backgroundmentioning

confidence: 99%

Section: Hypotheses and Model Developmentmentioning

confidence: 99%

Determinants of the purchase intention of non‐fungible token collectibles

Fortagne,

Lis

2023

J of Consumer Behaviour

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“…In the case of beauty, it is a possible industry that not only achieves economies of scale, but also parallel consumption in the case of cosmetics that can be used. Right now, beauty platforms using metaverse or making games by beauty itself have not been fully developed 39 . As cosmetics are essential consumer goods, we believe that they can be used in games, in terms of design that utilizes artistic senses, or anywhere.…”

Section: Discussionmentioning

confidence: 99%

“…Right now, beauty platforms using metaverse or making games by beauty itself have not been fully developed. 39 As cosmetics are essential consumer goods, we believe that they can be used in games, in terms of design that utilizes artistic senses, or anywhere.…”

Section: Discussionsmentioning

confidence: 99%

The applicability of scarcity, originality, and transaction tracking characteristics of the dermatological industry and non‐fungible token

Koo

Kwon

2022

J of Cosmetic Dermatology

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Background The K‐beauty industry has entered the global market and encompasses the global economy. In the future, it is necessary to recognize the need for rapid recognition and application of digital technologies such as non‐fungible token (NFT) in a continuously changing and shared society. Objectives This literature review presents various examples of ways to increase the value of beauty brands according to the latest digital trends. The potential value of blockchain technology was reviewed while understanding the current usage status of NFT. Methods As of July 2022, NFT's brand application cases can be confirmed, and comparisons and cases can be applied to how much it can contribute to the rise in the value of beauty brands in the future. The 41 references were finally selected using PRISMA flow diagram. Results In a rapidly changing time, the beauty industry pays attention to the NFT market that can develop economically. Therefore, the parts that various industries are preemptively trying were prepared by confirming the cases. Conclusion The beauty industry should pay attention to the NFT market, which is an issue, and by creating a brand with scarcity value, it can apply economic activities in the beauty industry to the trend by releasing products that both consumers and sellers can satisfy.

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“…His findings indicate that NFT markets are net receivers of volatility spillovers . Ko et al (2022) show that NFTs should be included in the equally weighted and tangency portfolio as its inclusion leads to better risk–return ratios. In their study, Aharon and Demir (2021) expect the hedge/safe‐haven potential of NFTs to be similar across gold and the USD index in terms of risk absorption during pandemic crisis.…”

Section: Literature Reviewmentioning

confidence: 99%

Exploring the time‐frequency connectedness among non‐fungible tokens and developed stock markets

Hemrit,

Benlagha,

Ben Arous

et al. 2023

Intell Sys Acc Fin Mgmt

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SummaryIn this paper, we examine the connectedness between volatilities for various non‐fungible tokens (NFTs) and developed stock markets during the period from July 1, 2018, to June 15, 2022. With the use of the time‐varying connectedness methods to explore the volatility interdependences among these assets, we find that there is a significant volatility connectedness during Russia's invasion of Ukraine and COVID‐19 periods. Evidence emerging from this study advocates the inclusion of NFTs in developed stock markets for medium and long time periods only. The results also suggest that UK and Germany stock markets are the predominant market of spillover transmission, whereas the XTZ is the top net recipient/transmitter of volatility connectedness shocks. Moreover, Chinese stock market and ENJ offer more diversification gains than others, and the volatility connectedness from US stock market to NFTs is more pronounced in the long‐term than the short‐term. Our research provides some urgent and prominent insights to help investors and policymakers to be aware that NFTs are important hedge assets that should be added to stock portfolios during periods of geopolitical stability and in the post‐pandemic times.

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The economic value of NFT: Evidence from a portfolio analysis using mean–variance framework

Cited by 71 publications

References 22 publications

Determinants of the purchase intention of non‐fungible token collectibles

Determinants of the purchase intention of non‐fungible token collectibles

The applicability of scarcity, originality, and transaction tracking characteristics of the dermatological industry and non‐fungible token

Exploring the time‐frequency connectedness among non‐fungible tokens and developed stock markets

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