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Art-related non-fungible tokens (NFTs) took the digital art space by storm in 2021, generating massive amounts of volume and attracting a large number of users to a previously obscure part of blockchain technology. Still, very little is known about the attributes that influence the price of these digital assets. This paper attempts to evaluate the level of speculation associated with art NFTs, comprehend the characteristics that confer value on them and design a profitable trading strategy based on our findings. We analyze 860,067 art NFTs that have been deployed on the Ethereum blockchain and have been involved in 317,950 sales using machine learning methods to forecast the probability of sale, the trade frequency and the average price. We find that NFTs are highly speculative assets and that their price and recurrence of sale are heavily determined by the floor and the last sale prices, independent of any fundamental value.
The project investigates how economic paradigm shifts that occur at the beginning of the 1970s (primarily the abandonment of the gold standard and the endlessly increasing pool of capital awaiting investment that succeeded it) led to the emergence of a unique building type: the high-altitude observation deck. Part investment vehicle, part iteration of an ongoing fascination with the view from above, the project presents the observation deck as the point where three distinct paradigms intersect: observation, speculation and spectacle. Tracing the emergence of the observation deck through a series of case studies (Top of the World atop the World Trade Center (NYC), One World Observatory (NYC), The Tulip (London) the project enriches its interdisciplinary approach with archival research and fieldwork. Re-telling the complicated collaboration between architect Warren Platner and graphic designer Milton Glaser at the end of the 1960s, the project lays out how the observation deck is conceived at a time when the perceived “crisis” of New York results in a rapidly accelerating neoliberalization of urban space. An avatar of this emerging ideology the observation deck is heavily invested in making the city visually comprehensible. Incorporating a sort of neoliberalist geometry, the deck transforms the city into a product to be consumed instead of a reality to live in and thus paves the way for other ventures of what has been called the “experience economy.” Thus, it signals the ongoing shift away from an architecture that possesses any use value, towards one that, as Barthes put it with regards to Eiffel Tower, is centered only on viewing and being viewed. A speculative machine, the observation deck renders the city into a product.
Using German and US brokerage data we find that investors are more likely to sell speculative stocks trading at a gain. Investors’ gain realizations are monotonically increasing in a stock’s speculativeness. This translates into a high disposition effect for speculative and a much lower disposition effect for non-speculative stocks. Our findings hold across asset classes (stocks, passive, and active funds) and explain cross-sectional differences in investor selling behavior which previous literature attributed primarily to investor demographics. Our results are robust to rank or attention effects and can be linked to realization utility and rolling mental account.