Bitcoin growth amid climate change: Policy and investment implications

Lashkaripour, Mohammadhossein, Hosseini, Seyedmehdi ORCID: https://orcid.org/0000-0002-9443-3960 and Ahmed, Rizwan 2026. Bitcoin growth amid climate change: Policy and investment implications. Journal of Environmental Economics and Management 139 , 103351. 10.1016/j.jeem.2026.103351

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Abstract

Bitcoin contributes to global carbon emissions on a scale comparable to entire countries in order to secure its decentralized network. This exposes Bitcoin to climate policies aimed at reducing emissions. This paper develops a general equilibrium framework to examine how the stringency of climate policy affects Bitcoin’s valuation and its relationship with the equity market. Our theoretical analysis delivers a key insight: a transition from a lenient to a stringent climate policy increases the conditional correlation between Bitcoin and equity returns, thereby compromising Bitcoin’s appeal as a hedge or diversifier against equity market volatility. Empirical evidence supports this theoretical prediction.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Schools > Business (Including Economics)
Publisher:	Elsevier BV
ISSN:	0095-0696
Date of First Compliant Deposit:	3 June 2026
Last Modified:	03 Jun 2026 10:04
URI:	https://orca.cardiff.ac.uk/id/eprint/187386

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