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The Dynamics of Fossil Fuels, Cryptocurrencies, and Clean Energy: Dose the Energy market's price volatility create an incentive for cryptocurrency mining?

Author

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  • Roudari, Soheil
  • Omidi, Vahid
  • Ahmadian-Yazdi, Fazaneh

Abstract

Countries with significant fossil fuel deposits may start to think about mining coins if the price of fossil fuels drops. This suggests that countries that export energy may decide to use the power produced from their fossil fuel stockpiles as a substitute method of cryptocurrency mining. To determine the extent of this trend, this research employs the TVP-VAR-EJC model to analyze the vulnerability and impact of the renewable energy market, cryptocurrencies, and fossil fuel energy between 18/01/2018 and 17/02/2023. The results reveal that the cryptocurrency market transmitted net shocks throughout the majority of the period. While the intensity of this relationship decreased in recent months, there is not enough evidence to validate the claim that energy-rich countries typically employ fossil fuels as a cryptocurrency mining input.

Suggested Citation

  • Roudari, Soheil & Omidi, Vahid & Ahmadian-Yazdi, Fazaneh, 2024. "The Dynamics of Fossil Fuels, Cryptocurrencies, and Clean Energy: Dose the Energy market's price volatility create an incentive for cryptocurrency mining?," MPRA Paper 126833, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:126833
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    JEL classification:

    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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