Negative elements of cryptocurrencies: Exploring the drivers of Bitcoin carbon footprints

This paper adopts an interactive network approach to investigate the factors driving the carbon footprint of Bitcoin, a negative aspect of cryptocurrencies. Our findings demonstrate that the dynamics of Bitcoin prices, including both returns and volatility, have a significant impact on the system comprising carbon emissions, energy prices, carbon prices, and financial indicators. During the first two years of the COVID-19 pandemic period, the spillover effects are observed to be particularly strong. Furthermore, we find that the dynamics of Bitcoin prices play a crucial role in driving its associated carbon emissions. •This paper investigates factors driving the carbon footprint of Bitcoin.•Bitcoin prices, energy prices, carbon prices and financial indicators are considered.•Price dynamics are found to have significant impacts on emissions from Bitcoin mining.•Spillovers in the system are found to be stronger during the COVID-19 pandemic.