On the Pricing Effects of Bitcoin Mining in the Fossil Fuel Market: The Case of Coal

Xolani Sibande (), Riza Demirer, Mehmet Balcilar and Rangan Gupta

No 202239, Working Papers from University of Pretoria, Department of Economics

Abstract: This paper examines the effect of crypto-currency mining activities on fossil fuel price dynamics, focusing on the coal market. Specifically, we utilise static and time-varying Granger causality tests to explore the causal linkages between Bitcoin electricity consumption and coal prices captured by the Argus/McCloskey's Coal Price Index for coal imported into northwest Europe. The results unsurprisingly reveal a time-varying causal link from the coal price to Bitcoin mining activities' electricity consumption. That is, the coal price is a constraint on mining activities. Surprisingly the evidence in the opposite direction is stronger, suggesting that electricity consumption from Bitcoin mining activities impacts the coal price. This interplay suggests that electricity consumption from Bitcoin mining activities may be larger than current estimates.

Keywords: Time-varying Granger causality; Crypo-currency market; Commodity Markets; Coal price (search for similar items in EconPapers)
JEL-codes: C12 C32 C58 G14 Q02 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2022-09
New Economics Papers: this item is included in nep-ene, nep-env and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: On the pricing effects of bitcoin mining in the fossil fuel market: The case of coal (2023)
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:pre:wpaper:202239

Access Statistics for this paper

More papers in Working Papers from University of Pretoria, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Rangan Gupta ().