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Jan 25, 2026·International Review of Economics & Finance
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Interconnected multiscale waves: Tracking shock transmission across cryptocurrency, energy, economy and the environment

Rabie Loukil, Nabila Boukef Jlassi, Foued Badr Gabsi, Amine Lahiani

This study examines the dynamic and multiscale connectedness among cryptocurrencies, energy markets, macro-financial variables, and environmental indicators in the United States from January 2014 to June 2025. Using a hybrid framework that combines wavelet decomposition with a time-varying parameter vector autoregression (TVP-VAR), we assess spillovers across short-, medium-, and long-term horizons. The results reveal a persistently high level of systemic integration, with the Total Connectedness Index (TCI) ranging between 70 % and 90 % and reaching about 93 % at long horizons. Three contagion regimes are identified: energy-crypto dominance before 2020, financial synchronization during the COVID-19 crisis, and a macro-energy-environmental phase after 2021 that evolves into a digital-sustainability regime by 2025. The multiscale decomposition uncovers hidden directional reversals, Bitcoin price shifts from a short-term volatility transmitter to a long-run structural influencer, while transaction and capitalization variables move from emitters to receivers as horizons lengthen. Robustness tests using a rolling-window VAR confirm the persistence of these dynamics. Overall, the evidence shows that short-term contagion is speculative and energy-driven, whereas long-term connectedness is anchored in inflation, industrial production, and electricity prices. These findings offer actionable insights for investors and policymakers seeking to manage systemic risk and design sustainable strategies at the intersection of digital finance, energy markets, and environmental policy.

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