Energy Consumption and Bitcoin Market

Reference Type:

Journal Article

Formatted Reference:

Published In:

Asia-Pacific Financial Markets

Year:

2022

Author(s):

Anh Ngoc Quang Huynh
Duy Duong
Tobias Burggraf
Hien Thi Thu Luong
Nam Huu Bui

Download Reference:

Search for the Publication In:

Source:

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.