Environmental attention in cryptocurrency markets: A catalyst for clean energy investments

The energy-intensive nature of cryptocurrency mining, largely reliant on fossil fuels in its early development, has raised growing environmental concern. Consequently, the Index of Cryptocurrency Environmental Attention (ICEA) has emerged, gauging public attention towards this issue. This study investigates the complex interplay between ICEA, cryptocurrency price and policy volatilities, green energy investments, and dirty energy prices. Utilizing a dataset spanning from January 2015 to June 2023, we employ a multifaceted approach encompassing cross-quantilogram, time-varying parameter vector autoregression (TVP-VAR), and wavelet coherence techniques to uncover the dynamic interconnectedness of these three markets. Our findings challenge a simplistic narrative that anticipates a direct link between ICEA and immediate reductions in electricity consumption within the cryptocurrency mining sector. Instead, we discern a nuanced picture wherein ICEA drives significant structural transformations, influencing investments in clean energy markets. Our analysis suggests that ICEA stimulates green energy investments, encouraging miners to explore alternative energy sources with lower environmental impacts. This transition paves the way for more sustainable investments, with green energy sources like renewables playing an increasingly prominent role in powering the cryptocurrency industry.