Work

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

Year: 2024

Type: article

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.

Source: Finance research letters

DOI: 10.1016/j.frl.2024.105997

Authors: Dora Almeida, Andreia Dionísio, Paulo Ferreira

Institutions: University of Évora, Universidade Politécnica de Portalegre

Language: English

Topic: Market Dynamics and Volatility

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Affordable and clean energy, Climate action

Open Access status: hybrid

Estimated APC paid: $3,350