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A clean, green haven?—Examining the relationship between clean energy, clean and dirty cryptocurrencies

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  • Ren, Boru
  • Lucey, Brian

Abstract

Is clean energy a safe haven for cryptocurrencies, or vice versa? In this paper, we investigate the hedge and safe haven property of a wide range of clean energy indices against two distinct types of cryptocurrencies based on their energy consumption levels, termed “dirty” and “clean”. Statistical evidence shows that clean energy is not a direct hedge for either of types. However, it serves as at least a weak safe haven for both in extreme bearish markets. Moreover, clean energy is more likely to be a safe haven for dirty cryptocurrencies than clean cryptocurrencies during increased uncertainty. We further study the spillover patterns among clean energy, cryptocurrency, stock, and gold markets. Weak connectedness is found between clean energy and cryptocurrencies which implies the potential use of clean energy as a hedge and diversification tool for cryptocurrencies in the future.

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  • Ren, Boru & Lucey, Brian, 2022. "A clean, green haven?—Examining the relationship between clean energy, clean and dirty cryptocurrencies," Energy Economics, Elsevier, vol. 109(C).
    • Handle: RePEc:eee:eneeco:v:109:y:2022:i:c:s0140988322001281
    DOI: 10.1016/j.eneco.2022.105951
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    More about this item

    Keywords

    Cryptocurrencies; Clean energy; Safe haven; Spillovers; Connectedness; DCC-GARCH;
    All these keywords.

    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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