Research Shows That NFTs Have Less Spillover Than Stocks and Cryptos Between NFT Markets
NFTs have been in the news a lot since their explosion in popularity over the last few months. Despite this, the concept for NFTs has been around almost as long as cryptocurrencies. The first NFT was created in 2014 by a pair of people named Anil Dash and Kevin McCoy. This NFT was a piece of digital artwork that showed golden dollar signs falling within a frame. Since then, there has been some very interesting research into the correlation between cryptocurrency prices and NFT prices. This research seeks to identify the potential of NFTs as an investment asset similarly to stocks and cryptocurrencies.
The Study’s Methods
As was just mentioned, there has been a concerted effort to dive into the investment potential of NFTs compared to other asset classes. A collaborative paper by the Rennes School of Business in France and the Dublin City University Business School explored the relationships between the prices of cryptocurrencies and those of NFTs. This early-stage research is pioneering our understanding of how NFTs interact with outside market forces and how these can have an influence on NFT prices. This isn’t like it’s coming from a bad source either, both universities are well-respected and have contributed a lot to the research community over the years.
The study made use of two datasets from both the Bitcoin and Ether markets, the two most popular cryptocurrencies. This data was pulled from CoinMarketCap. The data on NFTs used in the study was provided by market trades in Decentraland LAND tokens, Cryp-toPunk images, and game characters from Axie Infinity. These sources were all chosen as they are incredibly reputable and represent the best opportunity to get the highest quantity of high-quality data to drive the study.
The Study’s Findings
Now that you have more background information into NFTS, we can get down to the nitty-gritty. The results of this initial study are indicative of NFTs being a great potential investment asset for diversifying your portfolio. Despite this, it is still very early and more research needs to be conducted before a concrete answer to the question of NFT pricing can be confidently given.
The findings of the study showed that NFT pricing tends to be separate and not correlated with the prices of cryptocurrencies. This is amazing news for those that want to invest in NFTs, but are concerned about whether cryptocurrencies could impact their investment. Despite this, in the study itself, they acknowledged that more research was needed to confirm their low-correlation status. Despite the lack of correlation, there was still some suggestion that understanding cryptocurrency valuations and applying them to the NFT market is smart.
The Conclusions From The Study
This study has shown that NFTs could possibly stand alone as an asset class compared to cryptocurrencies and traditional stocks. This news is likely music to the ears of artists, who are currently enjoying both a resurgence in finance from their work and the freedom to work on what they want to. NFTs are likely here to stay for the long term. This is indicative of a promising future for the NFT market, however, as was stated in the study, more research is needed to come to a formal conclusion on this. We may be waiting some time for that additional research.
Another conclusion that was drawn from the study is the fact that the spillover between NFT markets is also minimal. This is very interesting as crashes within the crypto markets and stock markets all tend to have a noticeable impact on the other. Despite the fact that there is little spillover, that does not mean that there isn’t any relationship between the markets. It should also be noted that NFT markets may also be housing multiple different asset classes, which could influence these results.
Examples of NFT Artists
If you’re not too familiar with NFTs, then you may be shocked at the quality and originality of some of the artwork that is on offer. A lot of it isn’t like the art that you would normally see in galleries, which is mostly due to the fact that there is no middleman demanding how the art is made. Artists are given the freedom to create what they want and make a living from it. Down below are two examples of some of the best NFT artists around at the moment.
SOLOR
SOLOR, has been an artist for more than 20-years and he has become one of the first to jump on the ongoing NFT train. You can see his experience and creativity on full display within his artworks. His designs are eye-catching and effectively incorporate the use of repeating colors that shift in and out of one another. This has the effect of creating a dream-like piece of art. This is why it is important to note that SOLOR achieves his inspiration by putting himself into a deep meditative state. Then, he will put ‘pen to paper’ and create what he has seen using painting and digital photo manipulation.
As you can see from the above image, SOLOR’s artwork captures the imagination and something primal within you. If you’re interested in owning some of his art then you’re definitely in luck. SOLOR is scheduled to release a new drop of his artwork on Rarible. The drop will officially take place on the 28th of April, so time is running out for you to get your hands on some amazing artwork. Be sure to get on Rarible at 02:00 GMT + 2 to avoid any disappointment. It’s looking likely that he will blow up soon, so you’ll want to make sure you get something soon.
Travis Van Zanen
Travis Van Zanen is an Australian NFT artist that also goes by his artist name of ‘Big Swan’. He specializes in utilizing virtual reality technology to create vivid and otherworldly dreamscapes that you can get lost in. Surprisingly, before the advent of NFTs, Van Zanen struggled to get noticed due to the fact that many art galleries and museums don’t have the necessary VR technology to adequately display his work. This is why NFTs have been a godsend for the VR artist, who has even recently come to an agreement with an art gallery in Rome. To get the true experience of his work, you need to use VR.
Now, due to NFTs, Van Zanen has also managed to see commercial success. Some of his NFTs have already sold for thousands of dollars and once he becomes more popular, these prices are only likely to increase. If you have the money to buy some of his works, then it will definitely be worth it for you. It is truly amazing when an artist gets the attention that they deserve and the NFT revolution is doing a great job of accelerating this process. If you’re interested in his artworks then you should keep your eyes peeled for any future developments.
Conclusion
In closing, it can be seen that NFTs have great potential as both an investment asset and an avenue for artists to take back control of their working lives. Despite this, the way that NFT pricing works compared to both stocks and cryptocurrencies is a little different, with research suggesting that NFT pricing is not as heavily influenced by outside factors as the other two investment methods. Once more research comes out about the investment potential of NFTs, people are likely going to be more comfortable parting with a large amount of money for digital artworks.
