Cryptopricing: Whence comes the value for cryptocurrencies and NFTs?

Abstract

This article provides a critical review of pricing issues related to cryptocurrency and NFTs from a marketing perspective and tries to answer the question of whence comes the value for cryptocurrencies and NFTs. It shows that the value for a cryptocurrency like Bitcoin hinges on the collective belief in the marketplace in its long-term survival as a store of value and a unit of exchange. As such, the belief can give rise to a plethora of pricing equilibria for Bitcoin, and it can also be swayed by many demand factors. Consequently, Bitcoin prices will beset with uncertainties and speculations for the foreseeable future and can swing widely and wildly at times. However, the plethora of pricing equilibria also suggests that it is unlikely that Bitcoin may suddenly disappear after its long, successful run so far. In contrast, NFT prices find their value bases not so much in the collective belief in NFTs as a viable product category, although there are many reasons for optimism in that regard, but in the willingness to pay by individuals that depends on many familiar and well-studied factors. This article proposes many pricing-related research questions.