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Asymmetric effects of climate policy uncertainty and energy prices on bitcoin prices

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  • Sarker, Provash Kumer
  • Lau, Chi Keung Marco
  • Pradhan, Ashis Kumar

Abstract

This paper investigates the asymmetric effects of climate policy uncertainty (CPU) and the global price of energy index (GPEI) on Bitcoin prices. It applies the nonlinear ARDL method and the Granger causality test to examine how changes in climate policy uncertainty and energy prices influence Bitcoin prices. Using the monthly data of CPU, GPEI, and BTC from 2013M10–2021M12, the findings show that CPU's increases and GPEI's decreases positively affect BTC in the short term. Specifically, CPU and GPEI's increase and decrease show significantly higher effects on BTC in the long term. The causality result shows bidirectional causality between BTC and CPU's increases/decreases, while unidirectional causality runs from GPEI's increases/decreases to BTC. These findings suggest that Bitcoin investors should be aware of the risks associated with climate policy uncertainty and fluctuations in energy prices, as these factors can significantly asymmetrically impact Bitcoin prices.

Suggested Citation

  • Sarker, Provash Kumer & Lau, Chi Keung Marco & Pradhan, Ashis Kumar, 2023. "Asymmetric effects of climate policy uncertainty and energy prices on bitcoin prices," Innovation and Green Development, Elsevier, vol. 2(2).
    • Handle: RePEc:eee:ingrde:v:2:y:2023:i:2:s2949753123000164
    DOI: 10.1016/j.igd.2023.100048
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Sun, Yanpeng & Song, Yuru & Long, Chi & Qin, Meng & Lobonţ, Oana-Ramona, 2023. "How to improve global environmental governance? Lessons learned from climate risk and climate policy uncertainty," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1666-1676.
    2. Yin, Hua-Tang & Chang, Chun-Ping & Anugrah, Donni Fajar & Gunadi, Iman, 2023. "Gender equality and central bank independence," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 661-672.
    3. Zribi, Wissal & Boufateh, Talel & Guesmi, Khaled, 2023. "Climate uncertainty effects on bitcoin ecological footprint through cryptocurrency environmental attention," Finance Research Letters, Elsevier, vol. 58(PD).
    4. He, Zhifang & Dong, Tianqi & Qian, Wanchuan & Xu, Wei, 2024. "Dynamic interactions among trade policy uncertainty, climate policy uncertainty, and crude oil prices," International Review of Economics & Finance, Elsevier, vol. 95(C).
    5. Qin, Meng & Wu, Tong & Ma, Xuecheng & Albu, Lucian Liviu & Umar, Muhammad, 2023. "Are energy consumption and carbon emission caused by Bitcoin? A novel time-varying technique," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 109-120.
    6. Wu, Guo & Hu, Guoheng, 2024. "Asymmetric spillovers and resilience in physical and financial assets amid climate policy uncertainties: Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 208(C).
    7. Manel Mahjoubi & Jamel Eddine Henchiri, 2024. "The effect of policy uncertainty on the volatility of bitcoin," Journal of Financial Economic Policy, Emerald Group Publishing Limited, vol. 16(4), pages 429-441, May.
    8. Niu, Peng & Sun, Kun & Sun, Lirong & Chang, Chao-Wen, 2024. "The political economy and green innovation: A scientometric analysis," Innovation and Green Development, Elsevier, vol. 3(2).

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    More about this item

    Keywords

    Climate policy uncertainty; Bitcoin; Global energy prices; NARDL;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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