Clean Energy Stocks: Resilient Safe Havens in the Volatility of Dirty Cryptocurrencies

Rui Dias (), Paulo Alexandre, Nuno Teixeira and Mariana Chambino
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Rui Dias: Instituto Politécnico de Setúbal, ESCE-Escola Superior de Ciências Empresariais, 2910-761 Setúbal, Portugal
Paulo Alexandre: Instituto Politécnico de Setúbal, ESCE-Escola Superior de Ciências Empresariais, 2910-761 Setúbal, Portugal
Nuno Teixeira: Instituto Politécnico de Setúbal, ESCE-Escola Superior de Ciências Empresariais, 2910-761 Setúbal, Portugal
Mariana Chambino: Instituto Politécnico de Setúbal, ESCE-Escola Superior de Ciências Empresariais, 2910-761 Setúbal, Portugal

Energies, 2023, vol. 16, issue 13, 1-24

Abstract: Green investors have expressed concerns about the environment and sustainability due to the high energy consumption involved in cryptocurrency mining and transactions. This article investigates the safe haven characteristics of clean energy stock indexes in relation to three cryptocurrencies, taking into account their respective levels of “dirty” energy consumption from 16 May 2018 to 15 May 2023. The purpose is to determine whether the eventual increase in correlation resulting from the events of 2020 and 2022 leads to volatility spillovers between clean energy indexes and cryptocurrencies categorized as “dirty” due to their energy-intensive mining and transaction procedures. The level of integration between clean energy stock indexes and cryptocurrencies will be inferred by using Gregory and Hansen’s methodology. Furthermore, to assess the presence of a volatility spillover effect between clean energy stock indexes and “dirty-classified” cryptocurrencies, the t -test of the heteroscedasticity of two samples from Forbes and Rigobon will be employed. The empirical findings show that clean energy stock indexes may offer a viable safe haven for dirty energy cryptocurrencies. However, the precise associations differ depending on the cryptocurrency under examination. The implications of this study’s results are significant for investment strategies, and this knowledge can inform decision-making procedures and facilitate the adoption of sustainable investment practices. Investors and policy makers can gain a deeper understanding of the interplay between investments in renewable energy and the cryptocurrency market.

Keywords: cryptocurrencies; clean energy; safe haven; spillover (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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