Quantifying the asymmetric information flow between Bitcoin prices and electricity consumption
- Author
- Moinak Maiti, Darko B. Vukovic and Michael Frömmel (UGent)
- Organization
- Abstract
- The present study uses transfer entropy and effective transfer entropy to quantify the asymmetric information flow between monthly Bitcoin prices (Price) and total Bitcoin electricity consumption (Electricity). Both the Shannon and Re & PRIME;nyi estimates confirm a statistically significant information flow from Price to Electricity. However, Shannon and Re & PRIME;nyi methods yield mixed results in quantifying the information flow for Electricity to Price. That indicates a possible non homoge-neous and chaotic impact of total Bitcoin electricity consumption on Bitcoin prices. However, the Re & PRIME;nyi transfer entropy value converges with Shannon's as the value of q approaches to 1. The study findings are highly useful for managing the energy mix and carbon emissions associated with Bitcoin & other cryptocurrency mining.
- Keywords
- Energy mix, Transfer entropy, nyi, Re & PRIME, Shannon, Electricity consumption, Bitcoin
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Citation
Please use this url to cite or link to this publication: http://hdl.handle.net/1854/LU-01H6VCD7SSX8EHV9Q3D4FM31TD
- MLA
- Maiti, Moinak, et al. “Quantifying the Asymmetric Information Flow between Bitcoin Prices and Electricity Consumption.” FINANCE RESEARCH LETTERS, vol. 57, 2023, doi:10.1016/j.frl.2023.104163.
- APA
- Maiti, M., Vukovic, D. B., & Frömmel, M. (2023). Quantifying the asymmetric information flow between Bitcoin prices and electricity consumption. FINANCE RESEARCH LETTERS, 57. https://doi.org/10.1016/j.frl.2023.104163
- Chicago author-date
- Maiti, Moinak, Darko B. Vukovic, and Michael Frömmel. 2023. “Quantifying the Asymmetric Information Flow between Bitcoin Prices and Electricity Consumption.” FINANCE RESEARCH LETTERS 57. https://doi.org/10.1016/j.frl.2023.104163.
- Chicago author-date (all authors)
- Maiti, Moinak, Darko B. Vukovic, and Michael Frömmel. 2023. “Quantifying the Asymmetric Information Flow between Bitcoin Prices and Electricity Consumption.” FINANCE RESEARCH LETTERS 57. doi:10.1016/j.frl.2023.104163.
- Vancouver
- 1.Maiti M, Vukovic DB, Frömmel M. Quantifying the asymmetric information flow between Bitcoin prices and electricity consumption. FINANCE RESEARCH LETTERS. 2023;57.
- IEEE
- [1]M. Maiti, D. B. Vukovic, and M. Frömmel, “Quantifying the asymmetric information flow between Bitcoin prices and electricity consumption,” FINANCE RESEARCH LETTERS, vol. 57, 2023.
@article{01H6VCD7SSX8EHV9Q3D4FM31TD,
abstract = {{The present study uses transfer entropy and effective transfer entropy to quantify the asymmetric information flow between monthly Bitcoin prices (Price) and total Bitcoin electricity consumption (Electricity). Both the Shannon and Re & PRIME;nyi estimates confirm a statistically significant information flow from Price to Electricity. However, Shannon and Re & PRIME;nyi methods yield mixed results in quantifying the information flow for Electricity to Price. That indicates a possible non homoge-neous and chaotic impact of total Bitcoin electricity consumption on Bitcoin prices. However, the Re & PRIME;nyi transfer entropy value converges with Shannon's as the value of q approaches to 1. The study findings are highly useful for managing the energy mix and carbon emissions associated with Bitcoin & other cryptocurrency mining.}},
articleno = {{104163}},
author = {{ Maiti, Moinak and Vukovic, Darko B. and Frömmel, Michael}},
issn = {{1544-6123}},
journal = {{FINANCE RESEARCH LETTERS}},
keywords = {{Energy mix,Transfer entropy,nyi,Re & PRIME,Shannon,Electricity consumption,Bitcoin}},
language = {{eng}},
pages = {{5}},
title = {{Quantifying the asymmetric information flow between Bitcoin prices and electricity consumption}},
url = {{http://doi.org/10.1016/j.frl.2023.104163}},
volume = {{57}},
year = {{2023}},
}
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