Empirical Evidence Regarding Implications of Crypto-Assets Energy Usage on Climate

The crypto market is increasing every year in terms of crypto-assets issued and market capitalisation. Bitcoin remains the most known and tradable crypto-asset from this ecosystem and together with other crypto-assets have significant carbon footprint, being estimated in the current academic literature to be similar to the one of some medium size countries, such as Argentina, Egypt, Spain, the Netherlands or Austria. These facts are considered to affect the valuation of these crypto-assets and also the future of crypto-assets that use protocols with significant carbon footprint. In our paper we tried to present some possible policy options for prudential regulators and for authorities, that aim to raise concerns regarding climate-related considerations in crypto investors' practices. Our findings showed that climate policy uncertainty affects directly the profitability of mining activities and this is leading to a decrease in the overall hash rate of the Bitcoin network, with direct and severe implications on the security and reliability of the network. Meanwhile, our result showed that GPEI's decrease has a positive impact on Bitcoin prices, respectively, which would make Bitcoin mining and operation profitable, as energy cost is one of the most significant costs for mining activities.