Research Into The Impact Of Investor Attention On NFT Market Liquidity And Price

With the continuous development of digital currencies and blockchain technology,NFT(non-homogeneous tokens)has become a topic of concern.NFT is a kind of digital asset based on blockchain technology.Each NFT is unique and irreplaceable.NFT is widely used in digital art,games,virtual worlds and collectibles.The NFT market has boomed in recent years,and its prices and liquidity have also shown volatility.Investor attention is one of the important factors affecting the market.In recent years,the fields related to investor attention research have been developing from traditional financial markets,such as stock market and futures market,to emerging markets,such as cryptocurrency market.With the rise of the NFT market,investors are paying more and more attention to NFT.However,whether investor attention has a significant impact on liquidity and prices in the NFT market remains to be explored.Therefore,the "Study on the impact of Investor Attention on NFT market liquidity and its price" will help to better understand investors’ attitude and risk preference towards NFT market,and then help to develop more scientific investment strategies and risk management programs,so as to promote the steady development of NFT market.On the basis of summarizing domestic and foreign research results,this paper defines relevant core concepts and theoretical basis,elaborates the development process and market characteristics of NFT market in detail,and analyzes the mechanism of investor attention on NFT market liquidity and price volatility.Through VAR model and multifractal analysis,this paper empirically studies the influence of investor attention on NFT market liquidity and price,and draws the following conclusions: First,the research shows that there is a significant positive relationship between investor attention on NFT market and market liquidity.With the increase of investor attention,the trading volume and liquidity of NFT will increase accordingly;Second,investors’ attention to the NFT market has a relatively weak effect on the price of NFT.When investor attention increases,NFT prices usually rise,and when investor attention decreases,NFT prices may fall,but investor attention explains only a small part of the variation in price.In addition,the study also found that the impact of social media on the NFT market is significant.There is a strong correlation between the volume of social media discussions and searches related to NFT and market liquidity and prices,suggesting that social media has become one of the important factors influencing the NFT market.Through impulse response analysis and multifractal analysis,it is verified that the NFT market has anti-sustainability,that is,when the market is hit by an impact,it can always recover to the initial state after a certain time.Based on the above research,some suggestions are put forward for investors,regulators and creators of NFT market from the perspective of investors’ attention.Investors often need to invest according to the current popularity of NFT projects,which will be more likely to gain returns;Regulators should focus on monitoring projects that investors pay high attention to,and timely judge whether there is a bubble in the project and potential risks;Creators also want to do its good,always grasp the market heat.The conclusion looks forward to the future related research,such as the in-depth study on the interaction between investor attention and other indicators in the NFT market,and the adoption of more advanced and intelligent research methods based on machine learning.