The Dynamics of Fossil Fuels, Cryptocurrencies, and Clean Energy: Dose the Energy market's price volatility create an incentive for cryptocurrency mining?

Soheil Roudari, Vahid Omidi and Fazaneh Ahmadian-Yazdi

MPRA Paper from University Library of Munich, Germany

Abstract: Countries with significant fossil fuel deposits may start to think about mining coins if the price of fossil fuels drops. This suggests that countries that export energy may decide to use the power produced from their fossil fuel stockpiles as a substitute method of cryptocurrency mining. To determine the extent of this trend, this research employs the TVP-VAR-EJC model to analyze the vulnerability and impact of the renewable energy market, cryptocurrencies, and fossil fuel energy between 18/01/2018 and 17/02/2023. The results reveal that the cryptocurrency market transmitted net shocks throughout the majority of the period. While the intensity of this relationship decreased in recent months, there is not enough evidence to validate the claim that energy-rich countries typically employ fossil fuels as a cryptocurrency mining input.

Keywords: Oil; Natural Gas; Coal; Bitcoin; Ethereum; TVP-VAR; Graph Theory (search for similar items in EconPapers)
JEL-codes: C58 G11 Q41 (search for similar items in EconPapers)
Date: 2024-03-08
New Economics Papers: this item is included in nep-ene, nep-env and nep-pay
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