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Mitigating the Environmental Risk of Bitcoin through Environmentally Sustainable Financial Markets

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69
Author
Linh Pham Muhammad Abubakr Naeem Sitara Karim Larisa Yarovaya
Category
Financial
Date Posted
2023/01/24
Date Retrieved
2023/01/24
Date Revised
Date Written
2023/01/24
Description
This paper investigates the cross-quantile relationship between Bitcoin a carbon-intensive cryptocurrency and environmentally sustainable financial markets such as green cryptocurrencies carbon prices green stocks and green bonds. Using a cross-quantilogram approach our results show that Bitcoin is either negatively related or uncorrelated with environmentally friendly financial investments. The results suggest that green cryptocurrencies carbon prices green stocks and green bonds can provide diversification benefits for Bitcoin. However our findings show that the diversification benefits provided by cryptocurrencies weaken after 2020 while the diversification benefits provided by other markets are more stable over time. We derive the implications of our results for environmentally conscious investors and policymakers.
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JEL Classifications
Q4; G10; G11; G15
Keywords
Bitcoin; Carbon footprint; Green Finance; Cross-Quantile Dependence
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0
Pages
40
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