Energy-conserving cryptocurrency response during the COVID-19 pandemic and amid the Russia–Ukraine conflict

Abstract

PurposeThe mining process is essential in cryptocurrency networks. However, it consumes considerable electrical energy, which is undoubtedly harmful to the environment. In response, energy-conserving cryptocurrency projects with reduced energy requirements or based on renewable energies have been developed. Recently, the COVID-19 pandemic and the Russian invasion of Ukraine ignited an unprecedented upheaval in financial products, especially in cryptocurrency and energy markets. Therefore, the paper aims to explore the response of these energy-conserving cryptocurrencies to the COVID-19 pandemic and the Russia–Ukraine conflict.Design/methodology/approachThis paper investigates the response of these energy-conserving cryptocurrencies to the COVID-19 pandemic and the Russia–Ukraine conflict. Their competitiveness is compared with conventional ones by analyzing their efficiency through multifractal detrended fluctuation analysis and automatic variance ratio during the COVID-19 and Russian invasion periods.FindingsThe empirical results show that all investigated energy-conserving cryptocurrencies negatively responded to the pandemic and positively reacted to the Russian invasion. On the other hand, all conventional cryptocurrencies reacted negatively to the COVID-19 pandemic and the amid-Russian attack. Besides, Bitcoin and SolarCoin were the least inefficient before the outbreak of COVID-19. Nevertheless, the Ethereum market became the most efficient after the pandemic spread. Similarly, the efficiency of Ripple was the most significant during the conflict between Russia and Ukraine. The energy crisis caused by Russia benefited the efficiency of the studied energy-conserving cryptocurrencies.Practical implicationsThis research is of interest to investors seeking opportunities in these energy-conserving cryptocurrencies and policymakers working to implement reforms to improve their market efficiency and promote long-term financial market growth.Originality/valueTo the best of the authors' knowledge, the behavior of cryptocurrencies based on renewable and reduced energy during the recent conflict between Russia and Ukraine has not been explored.

The Cryptocurrency Assets Market in the Conditions of Military Aggression

“…Mother I See War and Art under Artillery launched NFT collections of war-themed children's drawings. The Ukraine DAO organization managed to collect about USD 7 million in aid for Ukrainians through the sale of an NFT picture of the Ukrainian flag [17]. The well-known project Rebel Society NFT released three limited editions of NFT under the name Good Rebels, the proceeds from the sale will be transferred to the Armed Forces of Ukraine.…”

“…At the same time, it is emphasized that such influence was more noticeable at the very beginning of the Russian invasion [1]. E. Mnif, K. Mouakhar, and A. Jarboui (2023) found an increase in the efficiency of the markets of energy-saving cryptocurrencies (Ethereum and Ripple) as a result of the Russian invasion of Ukraine [17]. Aija Lejneice (2022) emphasized the need to strengthen the regulation of the crypto-currency asset market in the context of the application of sanctions to subjects of the Russian Federation that carry out crypto-currency operations [15].…”