NON-FUNGIBLE TOKENS (NFTS): A PRELIMINARY ANALYSIS WITH COMPARABLE ASSETS

Non-fungible tokens (NFTs) began gaining traction before COVID-19. Various factors related to the pandemic, such as lockdowns, social distancing, and increased online shopping, significantly boosted the popularity of NFTs throughout 2022. During this period, they became hot topics on social media, generating considerable hype. However, NFT prices experienced a rapid decline in 2023, but they show signs of recovery in 2024. A comparative analysis of NFT prices against other financial assets, such as cryptocurrencies, real estate, gold, bonds, and stocks, is needed. This analysis could demonstrate that NFTs are helpful for portfolio diversification. This research aims to establish a preliminary operational definition of NFTs, assess investment risks, and evaluate their performance compared to various assets through a literature review and analysis of existing studies. The findings indicate that NFTs and cryptocurrencies have emerged as alternative investments to traditional assets like stocks and bonds. NFTs offer unique identifiers and undisputed claims about ownership, but they also carry higher risks and greater volatility—although with the potential for higher returns than other asset classes. Preliminary analysis shows that NFTs outperformed other assets during the COVID-19 pandemic. Further research could provide deeper insights into the factors behind NFT prices' decline and subsequent resurgence. Additional analysis may clarify the proper drivers of strength within the NFT market. Ultimately, this research could benefit practitioners and economic analysts who want to incorporate NFTs into their portfolios and develop risk mitigation strategies for future financial shocks.