Dynamic Co-movement Between NFTs and DeFi Tokens, Carbon ETFs, and AI: Nonlinear Dynamics and Sustainable Portfolio Implications

This study examines the dynamic interdependence between Clean Energy indices, AI Robotics ‎Index, and selected NFT and DeFi tokens across three major geopolitical crises: COVID-19 ‎pandemic (January 2020–April 2021), Russia-Ukraine war (February 2022–December 2022), ‎and Iran-Israel conflict (October 2023–June 2024). Employing continuous wavelet transform, ‎wavelet coherence, and partial wavelet coherence techniques, we decompose relationships ‎across short-term, medium-term, and long-term horizons using daily data from Bloomberg. ‎Descriptive statistics reveal fundamental differences between sustainable investments and ‎digital assets: Clean Energy (mean: 0.0008, variance: 0.0004) and AI Index (mean: 0.0003, ‎variance: 0.0002) demonstrate positive returns with low volatility, while NFT and DeFi tokens ‎exhibit negative average returns and substantially higher volatility, with AAVE showing ‎extreme kurtosis (773.27) and variance (0.0167). Wavelet coherence analysis reveals crisis-‎dependent and scale-specific patterns. During COVID-19, only short-term and medium-term ‎coherence emerged, indicating transitory speculative relationships. The Russia-Ukraine war ‎marked a structural shift, with AAVE demonstrating long-term coherence with Clean Energy, ‎suggesting deeper market integration driven by energy market disruptions. The Iran-Israel ‎conflict exhibited the most complex patterns, with broader long-term coherence across ENJ ‎Coin, Theta, Synthetix, Maker, and SUPERf, indicating structural convergence between energy ‎transition narratives and selected DeFi/NFT projects. These findings demonstrate that ‎NFT/DeFi-sustainable investment relationships are crisis-dependent, scale-specific, and ‎selectively integrative, with significant implications for portfolio diversification strategies and ‎systemic risk monitoring during geopolitical crises‎.