Assessing linkages between alternative energy markets and cryptocurrencies

Muhammad Abubakr Naeem, Raazia Gul, Saqib Farid, Sitara Karim, Brian M. Lucey

Research output: Contribution to journalArticlepeer-review

23 Citations (Scopus)

Abstract

Surmounted environmental concerns and energy challenges have created an augmented awareness among the public and policymakers about alternate energy resources. Using a network approach, this paper aims to investigate the dependence between cryptocurrencies and the alternative energy market using data from January 1, 2018, to December 23, 2021. For this investigation, first, we build a static dependency network for a given set of variables using partial correlations. Then, we demonstrate within-system connections in a minimum spanning tree (MST) to assess the centrality of all variables. Finally, rolling-window estimations are made to exhibit time variations in both dependency and centrality networks. We find that clean alternative markets (SPGCE, ELEVHC & WILCE) and ETH are net risk transmitters to other markets and system-wide net contributors. We also demonstrate how SPGCE is essential for tying together the various parts of the networks and provide convincing evidence of time-varying within-system dependency. Our thorough examination of the dependency analysis offers significant insights to macroprudential regulators, policymakers, and portfolio managers, enabling them to safeguard the most vulnerable markets and choose the best legislative and policy measures to protect investors' interests in the face of unforeseen financial and economic conditions.

Original languageEnglish
Pages (from-to)513-529
Number of pages17
JournalJournal of Economic Behavior and Organization
Volume211
DOIs
Publication statusPublished - Jul 2023

ASJC Scopus subject areas

  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management

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