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Interconnected dynamics of sustainable cryptocurrencies: Insights from transfer entropy analysis

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  • Lee, Seungju
  • Lee, Jaewook
  • Lee, Woojin

Abstract

This study introduces the concept of “sustainable cryptocurrencies”, unifying green and energy cryptocurrencies within a sustainability framework. Using transfer entropy-based network analysis, we examine their dynamics alongside diverse assets in the pre- and post-COVID periods. Our results reveal that sustainable cryptocurrencies exhibit strong volatility interconnections with major cryptocurrencies and the energy index, highlighting their unique characteristics. Meanwhile, green cryptocurrencies are more internally connected, and energy cryptocurrencies are closely tied to the energy index in the post-COVID period. These insights provide investors with guidance on using sustainable cryptocurrencies for portfolio diversification and risk management in line with sustainability goals.

Suggested Citation

  • Lee, Seungju & Lee, Jaewook & Lee, Woojin, 2025. "Interconnected dynamics of sustainable cryptocurrencies: Insights from transfer entropy analysis," Finance Research Letters, Elsevier, vol. 76(C).
    • Handle: RePEc:eee:finlet:v:76:y:2025:i:c:s1544612325001783
    DOI: 10.1016/j.frl.2025.106914
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    References listed on IDEAS

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    1. Xiao, Jihong & Xu, Wen & Liu, Hong & Zhao, Yunning, 2025. "Spillovers from oil price uncertainty to Chinese sectoral stock returns: New insights from effective transfer entropy," International Review of Financial Analysis, Elsevier, vol. 106(C).
    2. Mohammad Abdullah & Mohammad Ashraful Ferdous Chowdhury & Muhammad Saeed Meo & Chaker Aloui, 2025. "Are green and dirty cryptocurrencies connected with climate risk attention?," Economics and Business Letters, Oviedo University Press, vol. 14(4), pages 193-205.

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