NFTs and Cryptocurrencies—The Metamorphosis of the Economy under the Sign of Blockchain: A Time Series Approach

Abstract

Although NFTs (non-fungible tokens) and cryptocurrencies are active on the same market, their prices are not so closely related over time. The objective of this paper is to identify the relationship between the two types of assets (NFTs and the cryptocurrencies Ethereum, Crypto Coin, and Bitcoin), using data for the period between September 2020 until February 2022. The conclusions of the study are useful for cryptocurrency and NFT issuers, but also for investors on the financial market who are reconfiguring their portfolios with increasing frequency, and use these new assets for speculative or hedging purposes based on blockchain technology. The results highlighted relationships between NFTs and Ethereum, between Ethereum and Crypto Coin, and between Bitcoin and Ethereum, Ethereum being a bridge between all four. Therefore, NFTs present a relationship with Ethereum, the NFTs price had a causal effect on the price of Ethereum.