Predicting the Bubble of Non-Fungible Tokens (NFTs): An Empirical Investigation
share
Our study empirically predicts the bubble of Non-Fungible Tokens (NFTs): transferrable and unique digital assets on public blockchains. This subject is important because, despite their strong market growth in 2021, NFTs have not been studied in terms of bubble prediction. To achieve the purpose, we applied Logarithmic Periodic Power Law (LPPL) model to the time-series price data of major NFT projects, retrieved from nonfungible.com. Results implied that, as of December 20, 2021, (i) NFTs in general are in a small bubble (predicting price decline), (ii) Decentraland project is in a medium bubble (predicting price decline), and (iii) Ethereum Name Service and ArtBlocks projects are in a small negative bubble (predicting price increase). Future works are to refine the prediction by considering heterogeneity of NFTs, comparing other methods, and using more enriched data.
READ FULL TEXT