Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments August 30, 2021 erstellt
Beschreibung:
We utilize one of the earliest and largest NFT collections to investigate the pricing and the risk-return profile of NFTs. In general, we find that NFTs outperform traditional financial assets. Yet, investing in NFTs usually comes along with extremely high risks. The average monthly returns on NFTs range from 6.10% to 44.11%, and the standard deviations fluctuate between 44.35% and 74.57%, leading to a Sharpe ratio comparable to the NASDAQ index. NFT prices surge when there is a drastic increase in demand for alternative investments and a search for yield, especially in a low interest rate environment. We also find that the pricing of NFT largely depends on a token’s scarceness and an investor’s aesthetic preference. Hence, conventional asset-pricing models are unlikely to explain NFT returns. Overall, we provide the first evidence that NFTs serve as a novel investment vessel in this Fintech era