Energy Consumption and Bitcoin Market

Anh Ngoc Quang Huynh, Duy Duong (), Tobias Burggraf, Hien Thi Thu Luong and Nam Huu Bui
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Anh Ngoc Quang Huynh: University of Economics Ho Chi Minh City
Duy Duong: University of Economics Ho Chi Minh City
Tobias Burggraf: Allianz Endowed Chair of Finance, WHU - Otto Beisheim School of Management
Hien Thi Thu Luong: University of Economics Ho Chi Minh City
Nam Huu Bui: University of Massey

Asia-Pacific Financial Markets, 2022, vol. 29, issue 1, No 4, 79-93

Abstract: Abstract This paper is the first empirical paper to study the relationship between Bitcoin energy consumption and its market. Using the variance decompositions in combination with realized semi-variances for daily data, we find a relationship between Bitcoin energy consumption and its returns as well as volumes. Additionally, the directional impact from Bitcoin trading volumes to its energy consumption is higher than returns in the long run. The second Bitcoin crash also induces a higher connectedness of energy usage. Finally, we found the predictive power of energy on Bitcoin returns and volume. It holds true for the opposite predictive direction. Our results draw a challenge to the cryptocurrency ecosystems to sustainably innovate to impede their carbon footprint.

Keywords: Energy consumption; Bitcoin, Frequency domain (search for similar items in EconPapers)
JEL-codes: G10 Q43 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s10690-021-09338-4

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