# Review of Blockchain Tokens Creation and Valuation
## 4 Valuation and Price Determinants
### Price Determinants for NFTs  
Table 4 below shows the main methodologies for analyzing the factors that influence the price of NFTs found in our literature study. [PERSON] et al. [42] investigated if the NFTs are influenced by cryptocurrency by using a spillover index and bivariate wavelet coherence analysis. The analysis was based on weekly data for two years for the following markets (2019-2021): crypto--Bitcoin and Ether and NFT--Decentraland, CryptoPunks, and AxielnInfinity. The assumption was that the NFT market is intended for pure assets, while cryptocurrency is for currency, and that the cryptocurrency will influence the NFT market, based on the idea that in traditional \begin{table}
\begin{tabular}{p{113.8 pt} p{113.8 pt} p{113.8 pt} p{113.8 pt}} \hline \hline
**Methodology** & **Analysis Time Frame** & **Data** & **Price Influences** \\ \hline Quantile cross-spectral coherency and quantile regression techniques [39] & June 2017–February 2022 market (volume and return) & Daily data of the composite NFT market (volume and return) & Market conditions, investment horizon, and geopolitical risk \\ Garch model time series [36] & January 2018–July 2022 attention index & Average transaction price in secondary markets, NFT attention index & Macroeconomics, Economic policy uncertainty index \\ Asymmetric multifractal cross-correlations analysis [37] & November 2017–February 2022 & NFTs, DeFi, cryptocurrencies, and traditional assets such as the SP 500 and Gold & Market conditions, power-law cross-correlations of NFT with crypto currencies \\ LASSO Regression with Hedonic factors [21] & March 2020–March 2021 marketplace SuperBare & Behavioral price determinants of NFTs. \\ Automated Machine learning [35] & January 2022–July 2022 & 19,183 datapoints on NFT prices and NFT social communities & Social networks \\ Latent Dirichlet allocation [43] & December 2017–February 2021 & Token offerings from multiple well-known STO (security token offering) aggregators & Information disclosed positively impacts its success \\ Quantile VAR [38] & January 2018–November 2021 & Return-volume and return-volatility & Bullish market conditions anti head behavior \\ Variance ratio analysis [41] & March 2019–March 2021 & Market trades in Decentraland LAND tokens & Manipulation in pricing, or other fraudulent behavior \\ Statistical, clustering, and simple machine learning [44] & June 2017–April 2021 & 6.1 million trades of 4.7 million NFIs & Demand and supply, collectible features \\ \hline \hline \end{tabular}
\end{table} 
Table 4: Pricing influence factor methodologies. markets, the bigger markets influence the smaller markets (in this case the NFT market). Moreover, the fact that the two markets have a strong crossover of participants should also be mentioned. Based on the spillover index the transmission effects showed limited transmission between the NFT markets, meaning that each NFT pricing is independent. Compared to the crypto or the stock market, the NFT markets are not influenced by each other, which makes them desirable for investors with high diversification of portfolios, except for Ether and Decentraland, where some correlation co-movement was identified. Even if there is low volatility transmission the bivariate wavelet coherence analysis in terms of time and frequency suggests some co-movement, which could be due to having both groups of assets/markets influenced by common factors and pricing behavior. [PERSON] et al. (2019) examined the dependence between sales volume and return for NFTs and found that in all studied cases, an increase in Bitcoin prices reduces the NFT market return, as well as extreme conditions and oil, equity and gold markets uncertainty become predictors for NFT returns, while a difference was found between different NFT markets, namely that geopolitical risks significantly predict market returns for Cryptopunks and Decentraland. [PERSON] et al. (2019) investigate the root of the volatility of NFTs considering investor attention through Google search volume (GSV) and NFTs attention index.