IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v102y2026ics1544612326005829.html

Trade policy uncertainty, mining costs, and bitcoin prices

Author

Listed:
  • Liu, Qi
  • Wang, Ziqi
  • Gao, Dongxi
  • Yan, Jingzhou

Abstract

We examine the dynamic effects of U.S. trade policy uncertainty (TPU) on Bitcoin prices using a time-varying parameter VAR with exogenous regressors. Compared with standard VAR setups, we treat TPU as exogenous, which alleviates identification concerns. To proxy Bitcoin’s production cost, we construct a geographically weighted mining-cost index that combines regional electricity prices with miners’ shares of global hash rate. The results show that mining costs explain more than 20% of Bitcoin price variation under low TPU, while sentiment-driven demand factors account for a larger share of price fluctuations when TPU is elevated. Despite its speculative component, Bitcoin prices remain linked to macroeconomic fundamentals. The findings point to strengthening real-economy linkages of digital assets and offer implications for policymakers and financial institutions.

Suggested Citation

  • Liu, Qi & Wang, Ziqi & Gao, Dongxi & Yan, Jingzhou, 2026. "Trade policy uncertainty, mining costs, and bitcoin prices," Finance Research Letters, Elsevier, vol. 102(C).
    • Handle: RePEc:eee:finlet:v:102:y:2026:i:c:s1544612326005829
    DOI: 10.1016/j.frl.2026.110053
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612326005829
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2026.110053?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:102:y:2026:i:c:s1544612326005829. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.