Dynamic connectedness between green crypto investments and energy security risk during the COVID-19 pandemic and Ukraine-Russia conflicts

This study examines the dynamic linkages between energy-related uncertainty, monetary instability, and the volatility of selected cryptocurrencies. Employing an R 2 decomposed connection framework, the research analyzes monthly data from January 2018 to October 2023. The variables under consideration include the Energy-Related Uncertainty Index (EUI) and a composite monetary instability indicator. The cryptocurrency sample comprises several 'green' digital assets—Cardano (ADA), IOTA, NANO (XNO), Stellar Lumens (XLM), and Tron (TRX)—in contrast to the conventional non-green cryptocurrency, Bitcoin (BTC). The analysis focuses on differentiating between contemporaneous and lagged interconnections among these variables. Empirical findings indicate that the relationship between energy uncertainty and cryptocurrency volatility is primarily characterized by a lagged effect, with no significant contemporaneous impact observed. The results reveal a shifting dynamic over the sample period: cryptocurrency volatility was the dominant influencing factor from February 2021 through the end of that year. Conversely, energy-related uncertainty was the principal driver during the remaining periods, with its influence becoming particularly pronounced toward the end of the study's timeframe. • We use the R 2 decomposed connection approach. • We identify the contemporaneous and lagged linkages between green crypto and energy security risk. • The Ukraine-Russia tension influences the role of these variables.