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Energy Consumption and Bitcoin Market

Author

Listed:
  • Anh Ngoc Quang Huynh

    (University of Economics Ho Chi Minh City)

  • Duy Duong

    (University of Economics Ho Chi Minh City)

  • Tobias Burggraf

    (Allianz Endowed Chair of Finance, WHU - Otto Beisheim School of Management)

  • Hien Thi Thu Luong

    (University of Economics Ho Chi Minh City)

  • Nam Huu Bui

    (University of Massey)

Abstract

This paper is the first empirical paper to study the relationship between Bitcoin energy consumption and its market. Using the variance decompositions in combination with realized semi-variances for daily data, we find a relationship between Bitcoin energy consumption and its returns as well as volumes. Additionally, the directional impact from Bitcoin trading volumes to its energy consumption is higher than returns in the long run. The second Bitcoin crash also induces a higher connectedness of energy usage. Finally, we found the predictive power of energy on Bitcoin returns and volume. It holds true for the opposite predictive direction. Our results draw a challenge to the cryptocurrency ecosystems to sustainably innovate to impede their carbon footprint.

Suggested Citation

  • Anh Ngoc Quang Huynh & Duy Duong & Tobias Burggraf & Hien Thi Thu Luong & Nam Huu Bui, 2022. "Energy Consumption and Bitcoin Market," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 29(1), pages 79-93, March.
    • Handle: RePEc:kap:apfinm:v:29:y:2022:i:1:d:10.1007_s10690-021-09338-4
    DOI: 10.1007/s10690-021-09338-4
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    References listed on IDEAS

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    Cited by:

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    2. Li, Bin & Guo, Fei & Xu, Lei & Meng, Siqi, 2024. "Fintech business and corporate social responsibility practices," Emerging Markets Review, Elsevier, vol. 59(C).
    3. Maiti, Moinak & Vukovic, Darko B. & Frömmel, Michael, 2023. "Quantifying the asymmetric information flow between Bitcoin prices and electricity consumption," Finance Research Letters, Elsevier, vol. 57(C).
    4. Mingbo Zheng & Gen-Fu Feng & Xinxin Zhao & Chun-Ping Chang, 2023. "The transaction behavior of cryptocurrency and electricity consumption," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-18, December.
    5. Esparcia, Carlos & Fakhfakh, Tarek & Jareño, Francisco, 2024. "The green, the dirty and the stable: Diversifying equity portfolios by adding tokens of different nature," The North American Journal of Economics and Finance, Elsevier, vol. 69(PB).

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    More about this item

    Keywords

    Energy consumption; Bitcoin; Frequency domain;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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