Powering perception, echoing green voices: The interplay of Cryptocurrency's energy footprint and environmental discourse in steering the direction of the market
{"title":"Powering perception, echoing green voices: The interplay of Cryptocurrency's energy footprint and environmental discourse in steering the direction of the market","authors":"Iheb Ghazouani, Ines Ghazouani, Abdelwahed Omri","doi":"10.1016/j.bir.2024.12.020","DOIUrl":null,"url":null,"abstract":"<div><div>This study examines the influence of cryptocurrency's environmental footprint on market behavior through an analysis of 66,582 Reddit posts about Bitcoin and 23,231 about Ethereum. Using a vector autoregression (VAR) model, it explores the relationship between social media discussions on environmental issues, electricity use, and cryptocurrencies' market dynamics. We find a negative correlation between environmental discussions and Bitcoin volatility. Moreover, real electricity use has a more pronounced impact than social media discussions on both Bitcoin and Ethereum volatility. This indicates that crypto market investors prioritize real-world indicators over information from social media discussions. The study also reveals a bidirectional relationship between Bitcoin volatility and environmental posts, highlighting the complex interplay between market behavior and public discourse on environmental matters in the cryptocurrency domain. These results suggest the need for policies that limit energy consumption due to mining, promote renewable energy, and enhance investor education on environmental impacts to support sustainable practices in the cryptocurrency market.</div></div>","PeriodicalId":46690,"journal":{"name":"Borsa Istanbul Review","volume":"24 ","pages":"Pages 91-101"},"PeriodicalIF":7.1000,"publicationDate":"2024-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Borsa Istanbul Review","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S2214845024001741","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"2024/12/31 0:00:00","PubModel":"Epub","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
This study examines the influence of cryptocurrency's environmental footprint on market behavior through an analysis of 66,582 Reddit posts about Bitcoin and 23,231 about Ethereum. Using a vector autoregression (VAR) model, it explores the relationship between social media discussions on environmental issues, electricity use, and cryptocurrencies' market dynamics. We find a negative correlation between environmental discussions and Bitcoin volatility. Moreover, real electricity use has a more pronounced impact than social media discussions on both Bitcoin and Ethereum volatility. This indicates that crypto market investors prioritize real-world indicators over information from social media discussions. The study also reveals a bidirectional relationship between Bitcoin volatility and environmental posts, highlighting the complex interplay between market behavior and public discourse on environmental matters in the cryptocurrency domain. These results suggest the need for policies that limit energy consumption due to mining, promote renewable energy, and enhance investor education on environmental impacts to support sustainable practices in the cryptocurrency market.
期刊介绍：
Peer Review under the responsibility of Borsa İstanbul Anonim Sirketi. Borsa İstanbul Review provides a scholarly platform for empirical financial studies including but not limited to financial markets and institutions, financial economics, investor behavior, financial centers and market structures, corporate finance, recent economic and financial trends. Micro and macro data applications and comparative studies are welcome. Country coverage includes advanced, emerging and developing economies. In particular, we would like to publish empirical papers with significant policy implications and encourage submissions in the following areas: Research Topics: • Investments and Portfolio Management • Behavioral Finance • Financial Markets and Institutions • Market Microstructure • Islamic Finance • Financial Risk Management • Valuation • Capital Markets Governance • Financial Regulations
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