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Bitcoin-energy markets interrelationships - New evidence

Bitcoin-energy markets interrelationships - New evidence
Bitcoin-energy markets interrelationships - New evidence
The annual electricity consumption of cryptocurrency transactions has grown substantially in recent years, partially driven by the increasing difficulty in mining, but also driven by the large number of new market participants that have been attracted by the elevated prices of this developing financial asset. Total carbon production from mining now likely exceeds that generated by individual developed nations. This is now a prevailing and accepted feature in cryptocurrency markets, however unsustainable it may be. This paper investigates as to how Bitcoin’s price volatility and the underlying dynamics of cryptocurrency mining characteristics affect underlying energy markets and utilities companies. Further analysis of potential side-effects within the market for Exchange Traded Funds are considered. The results show a sustained and significant influence of
cryptocurrency energy-usage on the performance of some companies in the energy sector as separated by jurisdiction, emphasising the importance of further assessment of environmental impacts of cryptocurrency growth. Robustness testing presents evidence that dynamic correlations peaked during the sharp Bitcoin price appreciation of late-2017 as investors re-evaluated how this increased energy usage would influence the profitability of utility companies.
Bitcoin, cryptocurrencies, volaitlity, speculative assets, currencies, energy usage
0301-4207
Corbet, Shaen
8a3e20b1-891b-4102-82f2-e2c39a7a1d59
Lucey, Brian
ea62416d-8886-4acd-b160-f653aea6c319
Yarovaya, Larisa
2bd189e8-3bad-48b0-9d09-5d96a4132889
Corbet, Shaen
8a3e20b1-891b-4102-82f2-e2c39a7a1d59
Lucey, Brian
ea62416d-8886-4acd-b160-f653aea6c319
Yarovaya, Larisa
2bd189e8-3bad-48b0-9d09-5d96a4132889

Corbet, Shaen, Lucey, Brian and Yarovaya, Larisa (2021) Bitcoin-energy markets interrelationships - New evidence. Resources Policy, 70, [101916]. (doi:10.1016/j.resourpol.2020.101916).

Record type: Article

Abstract

The annual electricity consumption of cryptocurrency transactions has grown substantially in recent years, partially driven by the increasing difficulty in mining, but also driven by the large number of new market participants that have been attracted by the elevated prices of this developing financial asset. Total carbon production from mining now likely exceeds that generated by individual developed nations. This is now a prevailing and accepted feature in cryptocurrency markets, however unsustainable it may be. This paper investigates as to how Bitcoin’s price volatility and the underlying dynamics of cryptocurrency mining characteristics affect underlying energy markets and utilities companies. Further analysis of potential side-effects within the market for Exchange Traded Funds are considered. The results show a sustained and significant influence of
cryptocurrency energy-usage on the performance of some companies in the energy sector as separated by jurisdiction, emphasising the importance of further assessment of environmental impacts of cryptocurrency growth. Robustness testing presents evidence that dynamic correlations peaked during the sharp Bitcoin price appreciation of late-2017 as investors re-evaluated how this increased energy usage would influence the profitability of utility companies.

Text
A34 SC BL LY RP Btc Energy Markets Interrelationships - Accepted Manuscript
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Accepted/In Press date: 22 October 2020
e-pub ahead of print date: 19 November 2020
Published date: March 2021
Keywords: Bitcoin, cryptocurrencies, volaitlity, speculative assets, currencies, energy usage

Identifiers

Local EPrints ID: 444849
URI: http://eprints.soton.ac.uk/id/eprint/444849
ISSN: 0301-4207
PURE UUID: 1f509236-da0d-416b-84ea-dc006bc6da67
ORCID for Larisa Yarovaya: ORCID iD orcid.org/0000-0002-9638-2917

Catalogue record

Date deposited: 06 Nov 2020 17:32
Last modified: 27 Apr 2022 05:48

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Contributors

Author: Shaen Corbet
Author: Brian Lucey
Author: Larisa Yarovaya ORCID iD

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