Trade volume affects bitcoin energy consumption and carbon footprint

Sarkodıe, Samuel Asumadu; Ahmed, Maruf Yakubu; Leirvik, Thomas

doi:10.1016/j.frl.2022.102977

Cited by 47 publications

(26 citation statements)

References 14 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Huynh et al ( 2022 ) further find that Bitcoin volume exhibits higher connectedness with energy usage. Sarkodie et al ( 2022 ) agrees with Huynh et al ( 2022 ) who highlight that Bitcoin trade volume can boost long-term energy consumption. Erdogan et al ( 2022 ) further focus on the asymmetric relationship between cryptocurrency and environmental sustainability and show that the positive shock of Bitcoin demand exerts a causal influence on environmental degradation.…”

Section: Introductionsupporting

confidence: 65%

“…Gallersdorfer et al ( 2020 ) note that cryptocurrencies besides Bitcoin comprise about 33% of electricity consumption in the cryptocurrency market. The fast-growing energy consumption of cryptocurrency has led to concerns about its environmental effect and carbon footprint (Jiang et al 2021 ; Sarkodie et al 2022 ; de Vries et al 2022 ). Mora et al ( 2018 ) show that cryptocurrencies can potentially raise global temperatures by over 2 Celsius within less than three decades.…”

Section: Introductionmentioning

confidence: 99%

“…Second, we identify short- and long-run causalities between transaction behaviors and electricity consumption. While causality between financial determinants and energy consumption of cryptocurrency has been explored (Sarkodie et al 2022 ), structural breaks are not included in the causality analysis (Fantazzini and Kolodin 2020 ). Our study covers short- and long-run causalities simultaneously and includes breaks obtained from the cointegration test, which can support the credibility of causality.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

The transaction behavior of cryptocurrency and electricity consumption

et al. 2023

View full text Add to dashboard Cite

Rapidly increasing cryptocurrency prices have encouraged cryptocurrency miners to participate in cryptocurrency production, increasing network hashrates and electricity consumption. Growth in network hashrates has further crowded out small cryptocurrency investors owing to the heightened costs of mining hardware and electricity. These changes prompt cryptocurrency miners to become new investors, leading to cryptocurrency price increases. The potential bidirectional relationship between cryptocurrency price and electricity consumption remains unidentified. Hence, this research thus utilizes July 31 2015–July 12 2019 data from 13 cryptocurrencies to investigate the short- and long-run causal effects between cryptocurrency transaction and electricity consumption. Particularly, we consider structural breaks induced by external shocks through stationary analysis and comovement relationships. Over the examined time period, we found that the series of cryptocurrency transaction and electricity consumption gradually returns to mean convergence after undergoing daily shocks, with prices trending together with hashrates. Transaction fluctuations exert both a temporary effect and permanent influence on electricity consumption. Therefore, owing to the computational power deployed to wherever high profit is found, transactions are vital determinants of electricity consumption.

show abstract

Section: Introductionsupporting

confidence: 65%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

The transaction behavior of cryptocurrency and electricity consumption

et al. 2023

View full text Add to dashboard Cite

show abstract

“…Besides, the recessions in the world stock markets as of 2020, the impact of the COVID-19 pandemic on the global financial markets, as well as the uncertainty, low confidence that dominate the world economy, and high inflation expectation have significantly increased the demand for Bitcoin as an alternative investment tool (BinanceAcademy, 2021). Despite the high risk and volatility, cryptocurrencies have performed better than conventional investment instruments (Sarkodie et al, 2022). For instance, Bitcoin's price rose to $68,000 in November 2021, whereas its market cap was $1.2 trillion USD.…”

Section: Introductionmentioning

confidence: 99%

“…For instance, Bitcoin's price rose to $68,000 in November 2021, whereas its market cap was $1.2 trillion USD. In this context, the high performance of Bitcoin in an environment of uncertainty has increased the demand, and the miners who wish to gain a competitive advantage have begun to utilize more powerful computers and have caused higher levels of energy consumption (Sarkodie, 2022). Therefore, it is essential to investigate the relationships between Bitcoin energy consumption and the risk and uncertainty indexes, namely, GPRT and GEPU.…”

Section: Introductionmentioning

confidence: 99%

Bitcoin as an Alternative Financial Asset Class: Relations Between Geopolitical Risk, Global Economic Political Uncertainty, and Energy Consumption

Kevser

2022

Pamukkale Journal of Eurasian Socioeconomic Studies

View full text Add to dashboard Cite

The aim of this research is to investigate the causality between Global Economic Political Uncertainty (GEPU) and Geopolitical Risk (GPRT) and Bitcoin Energy Consumption (BTCE). In order to test the stationarity of the variables, the Lee-Strazich unit root test, which takes into account the structural breaks, was used, and the causality relationship between the variables was analyzed with the Hatemi-J (2012) causality test. Monthly data between May 2011 and February 2022 were used in the research. According to the results obtained from the research, geopolitical risk and global economic policy uncertainity are effective on bitcoin energy consumption. In addition, it has been determined that the negative effects of geopolitical risk and global uncertainties are more dominant. The results show that the demand for bitcoin, which is considered an alternative financial asset class, and accordingly bitcoin energy consumption, increases in case of global risks and economic uncertainties.

show abstract

Are cleaner energy and financial technologies needed? Contagion and causality evidence between global fintech markets, energy consumption, and environmental pollution

Ersin,

Bildirici

2024

Clean Techn Environ Policy

View full text Add to dashboard Cite

Financial technology (FinTech) depends on high amounts of energy with an upward trend, possibly affecting emissions due to energy consumption (EC). The study investigates tail dependence, contagion, and nonlinear between FinTech, EC, and carbon dioxide emissions (CO2e) with MS-GARCH-copula and MS-GARCH-copula-causality with a daily sample covering 02 Jan 2012–28 December 2022. The method is a generalized version of single-regime GARCH-copula and causality tests to Markov-switching. Empirical results indicated that FinTech, EC, and CO2e series follow nonlinear processes in addition to unit roots as determined by BDS nonlinearity tests and a set of linear and nonlinear unit root tests. Further, for all series, heteroskedasticity and nonlinear forms of heteroskedasticity cannot be rejected by ARCH–LM and White heteroskedasticity tests, leading to the estimation of the series and their joint dynamics by MS-GARCH-copula and a new MS-GARCH-copula based nonlinear Granger-causality test, the RSGCC test, under two distinct regimes characterized with the low and high volatility for extreme tails of data. Positivity and significance of copula parameters under both regimes indicate a high degree of positive but asymmetric tail dependence and contagion between FinTech & EC, in addition to contagion between FinTech & CO2e and EC & CO2e. RSGCC results determine unidirectional causalities from EC to CO2e and from FinTech to CO2e, coupled with bidirectional causality between FinTech and EC, which enhance the dynamics due to feedback effects. The findings of this paper are of importance for two central Sustainable Development Goals. Results could also be used to bring the FinTech markets and EC to the attention of policymakers, researchers, and eco-friendliness-focused portfolio managers. Graphical Abstract

show abstract

Trade volume affects bitcoin energy consumption and carbon footprint

Cited by 47 publications

References 14 publications

The transaction behavior of cryptocurrency and electricity consumption

The transaction behavior of cryptocurrency and electricity consumption

Bitcoin as an Alternative Financial Asset Class: Relations Between Geopolitical Risk, Global Economic Political Uncertainty, and Energy Consumption

Are cleaner energy and financial technologies needed? Contagion and causality evidence between global fintech markets, energy consumption, and environmental pollution

Contact Info

Product

Resources

About