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Energy-conserving cryptocurrency response during the COVID-19 pandemic and amid the Russia–Ukraine conflict

Emna Mnif (University of Sfax, Sfax, Tunisia)
Khaireddine Mouakhar (Métis Lab, EM Normandie–Campus du Havre, Le Havre, France)
Anis Jarboui (University of Sfax, Sfax, Tunisia)

Journal of Risk Finance

ISSN: 1526-5943

Article publication date: 22 December 2022

52

Abstract

Purpose

The mining process is essential in cryptocurrency networks. However, it consumes considerable electrical energy, which is undoubtedly harmful to the environment. In response, energy-conserving cryptocurrency projects with reduced energy requirements or based on renewable energies have been developed. Recently, the COVID-19 pandemic and the Russian invasion of Ukraine ignited an unprecedented upheaval in financial products, especially in cryptocurrency and energy markets. Therefore, the paper aims to explore the response of these energy-conserving cryptocurrencies to the COVID-19 pandemic and the Russia–Ukraine conflict.

Design/methodology/approach

This paper investigates the response of these energy-conserving cryptocurrencies to the COVID-19 pandemic and the Russia–Ukraine conflict. Their competitiveness is compared with conventional ones by analyzing their efficiency through multifractal detrended fluctuation analysis and automatic variance ratio during the COVID-19 and Russian invasion periods.

Findings

The empirical results show that all investigated energy-conserving cryptocurrencies negatively responded to the pandemic and positively reacted to the Russian invasion. On the other hand, all conventional cryptocurrencies reacted negatively to the COVID-19 pandemic and the amid-Russian attack. Besides, Bitcoin and SolarCoin were the least inefficient before the outbreak of COVID-19. Nevertheless, the Ethereum market became the most efficient after the pandemic spread. Similarly, the efficiency of Ripple was the most significant during the conflict between Russia and Ukraine. The energy crisis caused by Russia benefited the efficiency of the studied energy-conserving cryptocurrencies.

Practical implications

This research is of interest to investors seeking opportunities in these energy-conserving cryptocurrencies and policymakers working to implement reforms to improve their market efficiency and promote long-term financial market growth.

Originality/value

To the best of the authors' knowledge, the behavior of cryptocurrencies based on renewable and reduced energy during the recent conflict between Russia and Ukraine has not been explored.

Keywords

Citation

Mnif, E., Mouakhar, K. and Jarboui, A. (2022), "Energy-conserving cryptocurrency response during the COVID-19 pandemic and amid the Russia–Ukraine conflict", Journal of Risk Finance, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JRF-06-2022-0161

Publisher

:

Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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