THE RESILIENCE OF GREEN CRYPTOCURRENCIES UNDER GLOBAL SHOCK: LESSONS FROM COVID-19 AND THE RUSSIA-UKRAINE WAR MENA Regions

Abstract

This paper investigates the resilience and dynamic behavior of energy-conserving cryptocurrencies (ECCs) during two major global crises: the COVID-19 pandemic and the Russia–Ukraine conflict. Unlike traditional proof-of-work (PoW) assets, ECCs—primarily proof-of-stake (PoS) and low-energy blockchain tokens—are increasingly promoted as sustainable digital alternatives. Using a balanced panel of major ECCs across 10 countries with cryptocurrency markets from January 2019 to December 2023, we apply a panel ARDL–PMG model combined with panel causality tests and structural break analysis to examine the long- and short-run effects of global uncertainty on ECC returns and volatility. Our findings show that ECCs exhibit stronger crisis resilience compared with high-energy cryptocurrencies, with limited long-run exposure to pandemic shocks but moderate sensitivity to geopolitical tensions following the Russia–Ukraine conflict. COVID-19 uncertainty has a short-run negative pressure on ECC markets, whereas geopolitical risk (GPR) driven by the conflict generates asymmetric responses. Cross-country results reveal that ECC markets in technologically advanced, energy-transition economies (EU, Singapore, UAE) exhibit greater stability than those in emerging markets. These findings highlight the potential role of ECCs in sustainable finance, offering policymakers, investors, and regulators insights into the feasibility of promoting energy-efficient digital assets amid extreme global uncertainty.