Bitcoin mining activity and volatility dynamics in the power market

Utilizing a measure of the Bitcoin network's daily electricity load, we document a signifcant volatility effect of Bitcoin mining activity in three prominent electricity markets in the U.S. The volatility effect is found to be increasing over time, particularly with the widespread lockdowns enforced due to the COVID-19 pandemic. The fndings provide novel insight to the non-virtual side of mining and trading of cryptocurrencies and underscore the need for establishing mechanisms to prevent possible destabilizing effects of this growing industry, both from a power consumption and carbon emissions perspective.

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