Regional green economies and Bitcoin's electricity consumption: Paving the way for global sustainability

In the context of global sustainability goals, it is imperative to examine the interplay between emerging financial technologies and environmental objectives, which in turn offers insights into the implications of such technologies on sustainable investments and environmental policy decisions. Accordingly, this study investigates the influence of Bitcoin's energy consumption (BEC), as a representative of the cryptocurrency market, on the regional green economy indices of the United States, Europe, and Asia. Utilizing both unfiltered and filtered data, we conduct empirical analyses from both static and dynamic perspectives to account for the causal relationships that emerged during critical market developments, employing novel algorithms including forward recursive, rolling windows, and recursive rolling. The results reveal that energy-related developments play a dominant role in shaping the causal link between BEC and the green economy performance. More specifically, events such as the COVID-19 pandemic, the Russia-Ukraine war, and China's ban on cryptocurrency mining appear to significantly drive casual effects. After filtering out the impacts of global equity markets and information technology developments, we observe even more pronounced impacts on these causal relationships. Our findings highlight the need for coordinated global actions to address the energy consumption of the cryptocurrency market, facilitating the transition to global sustainability.