Information flow dynamics between cryptocurrency returns and electricity consumption: A comparative analysis of Bitcoin and Ethereum

Dora Almeida (), Andreia Dionísio and Paulo Ferreira

Finance Research Letters, 2024, vol. 68, issue C

Abstract: Understanding energy consumption associated with cryptocurrency mining gained increasing attention, with the literature focusing mainly on Bitcoin. This study uses data from the two energy consumption indices, to estimate static and dynamic transfer entropies. The results provide a nuanced understanding of the bidirectional relationships and their implications. The dominant direction of information flow for Bitcoin is from electricity consumption to returns, while for Ethereum, it is from returns to electricity consumption, suggesting that Ethereum's returns significantly impact electricity consumption patterns. Results highlight the need for policies that integrate energy forecasting and environmental sustainability considerations and has significant implications for policymaking.

Keywords: Cryptocurrency; Energy consumption; Bitcoin; Ethereum; Transfer entropy; Asymmetric information flow (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612324010274
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:68:y:2024:i:c:s1544612324010274

DOI: 10.1016/j.frl.2024.105997

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().