Investigation of the Effect of Bitcoin Energy Consumption on Bitcoin Prices with RALS Approach

Year 2025, Volume: 40 Issue: 3, 814 - 829, 16.07.2025

Ayşegül Han

https://doi.org/10.24988/ije.1502436

Abstract

This study aims to analyze the impact of Bitcoin energy consumption and Bitcoin hash rate on Bitcoin prices. Between 10.02.2017 and 31.10.2024, Engle-Granger and RALS-Engle-Granger cointegration tests were applied using daily data. According to the EG test, there is no long-run relationship between the variables. However, the RALS-EG test shows that there is a long-run relationship. The long-run coefficients of the variables were determined using the FMOLS, DOLS, and CCR tests, and the results were quite close. According to these methods, a 1% increase in bitcoin energy consumption leads to an increase in bitcoin prices of around 0.10%. A 1% increase in bitcoin hash rates leads to an increase in bitcoin prices of approximately 6.5%.

Keywords

RALS-ADF unit root test , RALS-EG cointegration test , coefficient estimation , Bitcoin energy consumption , Bitcoin prices

RALS Yaklaşımı ile Bitcoin Enerji Tüketiminin Bitcoin Fiyatlarına Etkisinin İncelenmesi

Abstract

Bu çalışma, Bitcoin enerji tüketimi ve Bitcoin hash oranının Bitcoin fiyatları üzerindeki etkilerini analiz etmeyi amaçlamaktadır. 10.02.2017 ile 31.10.2024 tarihleri arasındaki günlük veriler kullanılarak Engle-Granger ve RALS-Engle-Granger eşbütünleşme testleri uygulanmıştır. EG testine göre değişkenler arasında uzun dönemli bir ilişki olmadığı tespit edilmiştir. Ancak RALS-EG testi, uzun dönemli bir ilişki olduğunu göstermiştir. FMOLS, DOLS ve CCR testleriyle değişkenlerin uzun dönem katsayıları belirlenmiş ve sonuçların birbirine oldukça yakın olduğu görülmüştür. Bu yöntemlere göre, Bitcoin enerji tüketimindeki %1’lik artış, Bitcoin fiyatlarında yaklaşık %0,10’luk bir artışa yol açmaktadır. Bitcoin hash oranlarındaki %1’lik artış ise Bitcoin fiyatlarında yaklaşık %6.5’lik bir artışa yol açmaktadır.

Keywords

RALS-ADF birim kök testi , RALS-EG eşbütünleşme testi , katsayı tahmini , Bitcoin enerji tüketimi , Bitcoin fiyatları

References

• Baldwin, J. (2018). In digital we trust: Bitcoin discourse, digital currencies, and decentralized network fetishism. Palgrave Communications, 4(1). https://doi.org/10.1057/s41599-018-0065-0.
• Bâra, A., Oprea, S. V. ve Panait, M. (2024). Insights into bitcoin and energy nexus. A bitcoin price prediction in bull and bear markets using a complex meta model and sql analytical functions. Applied Intelligence, 1-29. https://doi.org/10.1007/s10489-024-05474-2.
• Binda, J. (2020). Cryptocurrencies–problems of the high-risk instrument definition. investment Management and Financial Innovations, 17(1), 227-241. http://dx.doi.org/10.21511/imfi.17(1).2020.20.
• Boz, E., and Mendoza, E. G. (2014). Financial innovation, the discovery of risk, and the us credit crisis. Journal of Monetary Economics, 62, 1-22. https://doi.org/10.1016/j.jmoneco.2013.07.001.
• Chitkasame, T., Rakpho, P. ve Khiewngamdee, C. (2022). Analyzing structural change and causality between energy consumption and Bitcoin’s activity. Energy Reports, 8, 736-743. https://doi.org/10.1016/j.egyr.2022.10.320.
• Damour, F. ve Damour, F. (2024). The first blockchain: bitcoin, entropy, religion.Zygon: Journal of Religion and Science, 59(1), 280–301. https://doi.org/10.16995/zygon.11004.
• De Vries, A. ve Stoll, C. (2021). Bitcoin’s growing e-waste problem. Resources, Conservation and Recycling, 175, 105901. https://doi.org/10.1016/j.resconrec.2021.105901.
• Engle, R. F. ve Granger, C. W. (1987). Co-integration and error correction: Representation, estimation, and testing. Econometrica: Journal of the Econometric Society, 55(2), 251-276. https://doi.org/10.2307/1913236.
• Fantazzini, D. ve Kolodin, N. (2020). Does the Hashrate Affect the Bitcoin Price? Journal of Risk and Financial Management, 13(11), 263. https://doi.org/10.3390/jrfm13110263.
• Giungato, P., Rana, R., Tarabella, A. ve Tricase, C. (2017). Current trends in sustainability of bitcoins and related blockchain technology. Sustainability, 9(12), 2214. https://doi.org/10.3390/su9122214.
• Güleç, Ö. F. (2018). Bitcoin ile finansal göstergeler arasındaki ilişkinin incelenmesi. Kırklareli Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 7(2), 18-37.
• Hansen, B. (1995). Rethinking the univariate approach to unit root testing. Econometric Theory, 11(5), 1148-1171. https://doi.org/10.1017/S0266466600009993.
• Hong, H. ve Zhang, C. (2023). Bitcoin trading, economic growth, energy use, and CO2 emissions: An advanced panel study of emerging market economies. International Review of Economics & Finance, 87, 519-531. https://doi.org/10.1016/j.iref.2023.06.003.
• Hossain, M. S. (2021). What do we know about cryptocurrency? Past, present, future. China Finance Review International, 11(4), 552-572. https://doi.org/10.1108/CFRI-03-2020-0026.
• Im, K. ve Schmidt, P. (2008). More efficient estimation under non-normality when higher moments do not depend on the regressors, using residual-augmented least squares. Journal of Econometrics, 144, 219-233. https://doi.org/10.1016/j.jeconom.2008.01.003.
• Im, K. S., Lee, J. ve Tieslau, M. A. (2014). More powerful unit root tests with non-normal errors. İçinde Festschrift in Honor of Peter Schmidt (Sickles, R., and Horrace, W. (eds)). Springer, New York. https://doi.org/10.1007/978-1-4899-8008-3_10.
• Judmayer, A., Stifter, N., Krombholz, K. ve Weippl, E. (2017). Blocks and chains: Introduction to bitcoin, cryptocurrencies, and their consensus mechanisms. Morgan & Claypool Publishers.
• Jumde, A., ve Cho, B. Y. (2020). Can cryptocurrencies overtake the fiat money? International Journal of Business Performance Management, 21(1-2), 6-20.
• Khan, D., Jung, L. T. ve Hashmani, M. A. (2021). Systematic literature review of challenges in blockchain scalability. Applied Sciences, 11(20), 9372. https://doi.org/10.3390/app11209372.
• Kubal, J. ve Kristoufek, L. (2022). Exploring the relationship between bitcoin price and network’s hashrate within endogenous system. International Review of Financial Analysis, 84, 102375. https://doi.org/10.1016/j.irfa.2022.102375.
• Küfeoğlu, S. ve Özkuran, M. (2019). Energy consumption of bitcoin mining. Working Paper, University of Cambridge: Cambridge, UK. https://doi.org/10.17863/CAM.41230.
• Lasla, N., Al-Sahan, L., Abdallah, M. ve Younis, M. (2022). Green-PoW: An energy-efficient blockchain proof-of-work consensus algorithm. Computer Networks, 214, 109118. https://doi.org/10.1016/j.comnet.2022.109118.
• Lee, H., Lee, J. ve Im, K. (2015). More powerful cointegration tests with non-normal errors. studies in Nonlinear Dynamics & Econometrics, 19(4), 397-413. https://doi.org/10.1515/snde-2013-0060.
• Leydesdorff, L. ve Bensman, S. (2006). Classification and powerlaws: The logarithmic transformation. Journal of the American Society for Information Science and Technology, 57(11), 1470-1486. https://doi.org/10.1002/asi.20467.
• Li, J., Li, N., Peng, J., Cui, H. ve Wu, Z. (2019). Energy consumption of cryptocurrency mining: A study of electricity consumption in mining cryptocurrencies. Energy, 168, 160-168. https://doi.org/10.1016/j.energy.2018.11.046.
• Maiti, M. (2022). Dynamics of Bitcoin prices and energy consumption. Chaos, Solitons & Fractals: X, 9, 100086. https://doi.org/10.1016/j.csfx.2022.100086.
• Mohsin, M., Naseem, S., Zia-ur-Rehman, M., Baig, S.A. ve Salamat, S. (2023). The crypto-trade volume, GDP, energy use, and environmental degradation sustainability: An analysis of the top 20 crypto-trader countries. International Journal of Finance & Economics, 28, 651–667. https://doi.org/10.1002/ijfe.2442.
• Moşteanu, D. N. R., Faccia, D. A., Cavaliere, L. P. L. ve Bhatia, S. (2020). Digital technologies’ implementation within financial and banking system during socio distancing restrictions–back to the future. International Journal of Advanced Research in Engineering and Technology, 11(6), 307-315.
• Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system. https://bitcoin.org/bitcoin.pdf.
• Oprea, S. V., Georgescu, I. A. ve Bâra, A. (2024). Is bitcoin ready to be a widespread payment method? Using price volatility and setting strategies for merchants. Electronic Commerce Research, 1–39. https://doi.org/10.1007/s10660-024-09812-x.
• Pirinççi, A. E. (2018). Yeni dünya düzeninde sanal para Bitcoin’in değerlendirilmesi. Uluslararası Ekonomi Siyaset İnsan ve Toplum Bilimleri Dergisi,1(1), 45-52.
• Rejeb, A., Rejeb, K. ve Keogh, J. G. (2021). Cryptocurrencies in modern finance: A literature review. Etikonomi, 20(1), 93-118. https://doi.org/10.15408/etk.v20i1.16911.
• Sarker, P. K., Lau, C. K. ve Pradhan, A. K. (2023). Asymmetric effects of climate policy uncertainty and energy prices on bitcoin prices. Innovation and Green Development, 2, 100048. https://doi.org/10.1016/j.igd.2023.100048.
• Sarkodie, S. A., Ahmed, M. Y. ve Leirvik, T. (2022). Trade volume affects bitcoin energy consumption and carbon footprint. Finance Research Letters, 48, 102977. https://doi.org/10.1016/j.frl.2022.102977.
• Schinckus, C., Nguyen, C. P. ve Chong, F. H. L. (2022). Cryptocurrencies’ Hashrate and electricity consumption: Evidence from mining activities. Studies in Economics and Finance, 39(3), 524-546. https://doi.org/10.1108/SEF-08-2021-0342.
• Sedlmeir, J., Buhl, H. U., Fridgen, G. ve Keller, R. (2020). The energy consumption of
• blockchain technology: Beyond myth. Business & Information Systems
• Engineering, 62(6), 599-608. https://doi.org/10.1007/s12599-020-00656-x.
• Siddique, I., Smith, E. ve Siddique, A. (2023). Assessing the sustainability of bitcoin mining: comparative review of renewable energy sources. Journal of Alternative and Renewable Energy Sources, 10(1), 10-46610.
• Stepanova, D., Yousif, N. B. A., Karlibaeva, R. ve Mikhaylov, A. (2024). Current analysis of cryptocurrency mining industry. Journal of Infrastructure, Policy and Development, 8(7), 4803. https://doi.org/10.24294/jipd.v8i7.4803.
• Tan, T. M. ve Saraniemi, S. (2023). Trust in blockchain-enabled exchanges: future directions in blockchain marketing. Journal of the Academy of marketing Science, 51(4), 914-939. https://doi.org/10.1007/s11747-022-00889-0.
• Tommerdahl, J. (2024). Introduction to the blockchain, Bitcoin, and other cryptocurrencies for educators. Neural Computing and Applications, 36(32), 20527-20536. https://doi.org/10.1007/s00521-024-10209-y.
• Vranken, H. (2017). Sustainability of Bitcoin and blockchains. Current Opinion in Environmental Sustainability, 28, 1-9. https://doi.org/10.1016/j.cosust.2017.04.011.
• Wang, Q., Qin, B., Hu, J. ve Xiao, F. (2020). Preserving transaction privacy in Bitcoin. Future Generation Computer Systems, 107, 793-804. https://doi.org/10.1016/j.future.2017.08.026.
• Xiao, Z., Cui, S., Xiang, L., Liu, P. J. ve Zhang, H. (2023). The environmental cost of cryptocurrency: Assessing carbon emissions from bitcoin mining in China. Journal of Digital Economy, 2, 119-136. https://doi.org/10.1016/j.jdec.2023.11.001.
• Yan, L., Mirza, N. ve Umar, M. (2022). The cryptocurrency uncertainties and investment transitions: evidence from high and low carbon energy funds in china. Technological Forecasting and Social Change, 175, 121326. https://doi.org/10.1016/j.techfore.2021.121326.
• Yılancı, V. ve Aydın, M. (2018). Türkiye’de kadın okullaşmasının ekonomik büyüme üzerindeki etkisi: Rals-Eg eşbütünleşme testi yaklaşımı. Uluslararası İktisadi ve İdari İncelemeler Dergisi, 101-112. https://doi.org/10.18092/ulikidince.426922.
• Zhang, D., Chen, X. H., Lau, C. K. M. ve Xu, B. (2023). Implications of cryptocurrency energy usage on climate change. Technological Forecasting and Social Change, 187, 122219. https://doi.org/10.1016/j.techfore.2022.122219.