Negative elements of cryptocurrencies: Exploring the drivers of Bitcoin carbon footprints

Abstract

This paper adopts an interactive network approach to investigate the factors driving the carbon footprint of Bitcoin, a negative aspect of cryptocurrencies. Our findings demonstrate that the dynamics of Bitcoin prices, including both returns and volatility, have a significant impact on the system comprising carbon emissions, energy prices, carbon prices, and financial indicators. During the first two years of the COVID-19 pandemic period, the spillover effects are observed to be particularly strong. Furthermore, we find that the dynamics of Bitcoin prices play a crucial role in driving its associated carbon emissions.