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Investor Composition and the Market for Music Non-Fungible Tokens (NFTs)

December 15, 2023

by Danling Jiang, Lin Sun, Lolita Nazarov, Jiarong Chen, Yihan Yang, Xinning Guo

  • Sponsored by the Ethereum Foundation Academic Grant (ID: FY22-0683); Bold face indicates authors affiliated with BBL at the project start.

We study how investor composition is related to future return, trading volume, and price volatility in the cross-section of the music-content non-fungible tokens (music NFTs). Our results show that the breadth of NFT ownership negatively predicts weekly collection-level median-price returns and trading counts. In contrast, ownership concentration and the fraction of small wallets are positive predictors. The fraction of large NFT wallets is a bearish signal for future collection floor-price returns. Investor composition measures have weak predictive power on price volatility. Further analysis indicates that an artist’s Spotify presence moderates the predictive power of investor composition for future NFT returns and trading volume, consistent with the notion that reducing information asymmetry helps improve price efficiency.  

[Keywords] Non-fungible tokens, Blockchain, Ethereum, OpenSea, Spotify

  1. Video 1: Music NFTs on the Ethereum Blockchain
  2. Video 2: Dune Analytics 2
  3. Video 3: Introduction to SQL3
  4. Video 4: Investor Composition and Music NFTs

Citation:

Jiang, Danling and Sun, Lin and Nazarov, Lolita and Chen, Jiarong and Yang, Yihan and Guo, Xinning, Investor Composition and the Market for Music Non-Fungible Tokens (NFTs) , 2023. Available at SSRN: https://ssrn.com/abstract=4677535 or http://dx.doi.org/10.2139/ssrn.4677535

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By Hubert, Pun, Jungsoo Ahn, Carrie Song, James Morales

 

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by VergneJean-Philippe, Ahn Jungsoo, Eric Zhao

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    • Academy of Management Annual Meetings (Virtual). 
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    • Academy of Management Annual Meetings (Boston).

 

Situated signaling: How signaling environment moderates the effects of quality signals on fundraising success of initial coin offerings 

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By Blaseg, D.  & Chan, C.S.R

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Blockchain Speculation or Value Creation? Evidence from Corporate Investments

Financial Management, 2021, 50: 727–746 (Won the "Top 3 Best Paper Award")

by Don M. Autore, Nicholas Clarke, and Danling Jiang

Many corporate executives believe blockchain technology is broadly scalable and will achieve mainstream adoption, yet there is little evidence of significant shareholder value creation associated with corporate adoption of blockchain technology. We collect a broad sample of firms that invest in blockchain technology and examine the stock price reaction to the first public revelation of this news. Initial reactions average close to +13% and are followed by reversals over the next three months. However, we report a striking difference based on the credibility of the investment. Blockchain investments that are at an advanced stage or are confirmed in subsequent financial statements are associated with higher initial reactions and little or no reversal. The results suggest that credible corporate strategies involving blockchain technology are viewed favorably by investors.

Keywords: Blockchain; Bitcoin; Cryptocurrency; Investment Credibility

Citation:

Autore, Don, Nicholas Clarke, and Danling Jiang Blockchain Speculation or Value Creation? Evidence from Corporate Investments. Financial Management, 2021, 50: 727–746. https://doi.org/10.1111/fima.12336