1. Do crypto investors care about energy use and climate change? Evidence from Ethereum's transition to proof-of-stake.
- Author
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Baur, Dirk G. and Karlsen, Jonathan R.
- Subjects
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INVESTORS , *CRYPTOCURRENCIES , *CARBON emissions , *ENERGY consumption , *BITCOIN - Abstract
This paper analyses the transition of Ethereum (ETH) from the energy-intensive Proof-of-Work (PoW) to the less energy-intensive Proof-of-Stake (PoS). We analyze returns, volatility, return correlations and volume of ETH, ETC and Bitcoin for all events in the lead-up to the actual change from PoW to PoS also labelled "the merge." The analysis suggests that some investors value the less energy-intensive mining mechanism and invest in ETH. However, since the overall effect is weak, we conclude that despite all the media attention and the stated concerns about the high energy-intensity of Bitcoin and PoW, most investors do not react to the change with an increased investment in Ethereum. • Financial effects of Ethereum's transition from energy-intensive Proof-of-Work to less energy-intensive Proof-of-Stake. • Analysis of returns, volatility, return correlations and volume of ETH, ETC and Bitcoin. • We identify no material financial effects for Ethereum, despite global concerns and media focus on Bitcoin's energy use. [ABSTRACT FROM AUTHOR]
- Published
- 2024
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