Bitcoin Drives Green Crypto, but Oil Triggers Crashes

Bitcoin’s (BTC ) price tumbled on Monday as oil fell after US President Donald Trump paused fresh attacks on Iran and announced the resumption of peace talks. Brent crude fell almost 6% to $83.55 a barrel while WTI dropped over 6% to $79.54 a barrel.

Both have surged more than 14.5% in the past month. Oil prices have been highly volatile throughout this year, whipsawing between spikes above $100 a barrel during periods of escalation and sharp drops whenever a ceasefire breakthrough looked possible.

For instance, WTI prices started 2026 below $60, only to surge to nearly $113 in early April. Then in July, WTI prices fell just under $69 before rising past $92 in the second half of the month, only to stay under $85 in the last week.

The latest drop in oil prices came as Trump said on social media that “the perimeters of a deal” for the “Total OPENING” of the Strait of Hormuz are being negotiated. At the same time, key members of OPEC+ said they would raise output by about 188,000 barrels a day in September.

As oil prices fell on hopes of a possible US-Iran deal that could ease supply disruptions, it somewhat eased concerns over inflation and higher interest rates, resulting in Treasuries rallying, with the 10-year yield dropping to 4.66% after hitting its highest level since January 2025 just last week. This put the US dollar under pressure. The greenback was also weighed down by authorities intervening in the foreign exchange market to support the yen.

By making dollar-priced bullion more affordable, the dollar’s weakness sent spot gold above $4,060 per ounce, which has today risen further to $4,077.67. Continued uncertainty around oil markets is limiting gains in the precious metal, which is seen as a hedge against inflation, though because it doesn’t yield interest, its safe-haven appeal tends to diminish in a high-rate environment.

Much like gold, Bitcoin is also a non-yielding asset and is negatively affected by rising rates. But unlike bullion, BTC slipped even as macro conditions improved, yields fell, and stock futures rose. The price of Bitcoin fell under $62,500 on Monday but recovered the following day.

As of writing, BTC/USD is trading at $63,665, down 28% year-to-date (YTD) and 44.4% over the past year. With that, Bitcoin’s August performance has turned green by 1.31%, after a green July (+7.36%) but a deep red June (-20.48%), according to data from CoinGlass. BTC’s performance has been diverging from equities for some time, with spot ETFs recording outflows and the futures market lacking action as OI remains static.

Compared to Bitcoin, altcoins like ETH, XRP, SOL, ADA, HYPE, and others fell even harder.

That isn’t abnormal, as the leading cryptocurrency tends to set the direction for altcoins to follow. Moving forward, all eyes are on the Iran talks, as a deal that reopens Hormuz would push oil lower. This year, Bitcoin has repeatedly moved in the same direction as energy-driven risk sentiment, falling when Middle East tensions spiked oil and rallying when they eased.

Interestingly, every time BTC slid, so did the so-called “green” cryptocurrencies, including ETH, ADA, XLM, and the rest of the Proof-of-Stake (PoS) coins marketed as sustainable “green” alternatives to Bitcoin’s energy-hungry mining.

The total crypto market capitalization now sits at $2.26 trillion, down from the $4.34 trillion peak hit in early October 2025, when Bitcoin made its new all-time high (ATH) of around $126,000. BTC has lost more than half its value since then, and so has the total market.

This raises an important question: is “green” just a technological label that stops mattering the moment markets get nervous? A newly published academic study set out to answer exactly that question with rigorous econometric tools, and its findings show just what markets have been living through this year.

The Promise of Sustainable Crypto

In crypto, blockchains form the basis on which digital currencies, smart contracts, and decentralized applications are built. These distributed ledgers safely record transactions across a network of computers without needing a central authority like a bank.

But every blockchain network requires a consensus mechanism to reach agreement on the state of the ledger. Before a new block of transactions is added to the chain, nodes on a blockchain agree upon their accuracy with the help of consensus mechanisms, which prevent fraudulent transactions.

Proof of work (PoW) and proof of stake (PoS) are the most common consensus mechanisms in the industry. In PoW, participants called miners spend a significant amount of computational power to solve complex mathematical problems, and the first to do so gets to add the next block of transactions to the blockchain and is rewarded with a predetermined amount of BTC.

While anyone can participate in this process, which is called mining, it requires specialized mining hardware and access to cheap electricity.

PoS was created as a solution to the significant environmental concerns produced by Bitcoin’s resource-intensive PoW consensus mechanism, namely massive electricity consumption and high carbon footprints from its reliance on fossil fuels. This “sustainable” alternative involves validators, who own and put their crypto at stake. The more crypto a validator stakes, the greater their mining capability.

Low-energy consensus mechanisms like PoS, proof-of-authority, and others make crypto cleaner by design. For instance, Ethereum’s (ETH ) move to PoS from PoW cut its energy footprint by more than 99%. Other coins like Cardano (ADA ), Algorand (ALGO ), and Stellar (XLM ) are also among those that built their entire market identity around their comparably light energy use.

On the technology side, this distinction is very real. Besides having a much lower environmental footprint, PoS is faster and more scalable. But lower energy consumption doesn’t automatically make a cryptocurrency financially independent from the broader ecosystem. A coin’s consensus mechanism only determines how its blockchain validates transactions; it has no impact on who holds it, where it trades, or what moves its price.

Most of these sustainable crypto assets still trade alongside Bitcoin on the same venues, share many of the same investors, and are influenced by the same macroeconomic conditions.

As a result, investors often price them as part of a single speculative asset class rather than as a fundamentally separate market. During periods of market stress, investors don’t reward greener cryptocurrencies; rather, they reduce risk across the board, with Bitcoin setting the general direction while energy-price shocks can destabilize the entire segment.

Why Greener Doesn’t Mean Safer

The gap between technological design and financial reality is the subject of the new study titled “The investigation of the asymmetric influence of Bitcoin and energy prices on sustainable cryptocurrency valuation.¹”

The study examines whether environmentally sustainable cryptocurrencies are genuinely decoupled from Bitcoin and energy markets, or only appear greener while remaining financially dependent on them.

Instead of fitting a standard linear regression, which can only estimate a single average relationship between variables, the researchers made their paper distinctive by using a cusp catastrophe model.

This framework distinguishes between gradual market adjustments and abrupt regime shifts.

The choice of model is based on three perspectives. The first is behavioral finance, which points to crypto markets being strongly influenced by investor sentiment, bounded rationality, and herding. The second is the theory of multiple equilibria and regime switching, in which financial systems can have distinct states, such as calm, bullish, and crisis, and even tiny changes in underlying conditions can cause a sudden transition between them. The third is the theory of production and costs, with energy prices directly affecting mining profitability and thus the valuation and stability of the broader market.

Their methodological approach allowed the researchers to separate market behavior into two channels: an “asymmetry” function that captures normal, directional price adjustment and a “bifurcation” function that captures the conditions under which the market becomes unstable and prone to sudden, discontinuous jumps between regimes.

This distinction lets the researchers ask not only how strongly Bitcoin and oil move the prices of sustainable cryptos, but also whether they do so through orderly adjustment or through triggering instability.

For their analysis, the authors covered eight sustainable cryptocurrencies: Cardano (ADA), Tron (TRX ) (TRX), Stellar (XLM), IOTA (MIOTA ), Holo (HOT ) (HOT), EOS, NANO (XNO ), and Power Ledger (POWR), using daily data from June 2018 to July 2023.

What the study found is that Bitcoin and oil play different roles in determining sustainable crypto valuations.

When it comes to Bitcoin, with its trillion-dollar market cap, it dominates the asymmetry channel. By governing the direction of prices, it acts as the main benchmark that shapes investor expectations and overall market sentiment.

This “implies that sustainable cryptocurrencies remain strongly connected to the broader digital asset environment, with their returns adjusting in line with changes in Bitcoin prices.” When the BTC price rises, the price of sustainable cryptocurrencies generally rises as well, and when it falls, they tend to follow.

Bitcoin was a positive and statistically significant directional driver for six of the eight assets, with POWR and Tron as the exceptions.

Oil prices also weakened the directional performance of most sustainable cryptocurrencies, but their more consequential role emerged in the bifurcation channel, where energy shocks increased the risk of abrupt instability. Acting as the principal trigger for structural instability, rising oil prices significantly raise the probability that sustainable cryptocurrencies experience abrupt market transitions and sharp sell-offs, for every coin studied except Tron.

“It indicates that oil prices act less as standard pricing determinants and more as variables that influence the stability of the pricing process itself.”

What this means is that Bitcoin determines the general direction the market is heading on a day-to-day basis, while oil determines how unstable that journey becomes, pushing the whole sector over the edge into a crash.

The effects, however, are not fully homogeneous across all sustainable cryptos, as seen in Tron’s exceptions; thus, the study argues, they shouldn’t be treated as a uniform asset class. It stated:

“Differences in liquidity, market depth, investor base, project maturity, and technological architecture may influence the extent to which each asset responds to directional shocks and instability triggers.”

Moreover, the researchers found little evidence for the “rational substitution effect” that many might expect.

Per this effect, higher energy prices should make energy-intensive PoW crypto relatively less attractive and push capital into lower-energy alternatives. Rational reallocation is not what’s seen in the market, though; rather, it is dominated by speculative herding behavior. So, when energy prices rise and tighten liquidity, sustainable cryptos largely act just like Bitcoin and mirror its declines instead of benefiting from their lower energy requirements.

This was seen in 2022, when energy prices surged following Russia’s invasion of Ukraine. At the time, coins marketed explicitly on their low energy footprint were sold off in tandem with Bitcoin rather than attracting capital.

The effect of Bitcoin may also reflect broader behavioral and sentiment-driven mechanisms.

“In cryptocurrency markets, where valuation is often weakly tied to conventional fundamentals, investors may respond to Bitcoin price increases as signals of optimism (OP ), speculative opportunity, and market-wide momentum,” the study stated. “This can lead to stronger demand for sustainable cryptocurrencies as part of a wider spillover process.”

The authors ran robustness checks through quantile regression, which confirmed that the same pattern holds across most of the return distribution, with oil’s negative effect strongest in the distressed lower tail where a truly green safe haven would be expected to decouple.

For investors, the study has clear implications: sustainable cryptocurrencies should not be viewed as effective hedges against either Bitcoin’s weakness or energy-price shocks.

Portfolio managers can’t rely solely on average correlations; rather, they must account for nonlinear risks and sudden regime changes. For the issuers of these sustainable cryptos, the study recommends that credibility is better served by acknowledging this exposure than by implying decoupling.

For policymakers, the study findings indicate that regulators shouldn’t interpret “green” labeling as an indicator of lower systemic financial risk, as energy-driven instability spreads into these assets just as readily as anywhere else.

The authors conclude that these assets may be greener in technological design, but their market behavior remains closely tied to Bitcoin’s price direction, while oil-price shocks can still destabilize the entire segment.

“Broader financial uncertainty, proxied by the VIX, weakens directional adjustment and, for several assets, amplifies instability,” stated the study. “Taken together, the evidence indicates that sustainable cryptocurrencies are not financially insulated from the wider crypto-energy-finance nexus: although greener in design, their prices remain anchored to Bitcoin and vulnerable to energy-driven instability.”

For public-market investors, these findings make a direct bet on any supposedly sustainable cryptocurrency less compelling. A broader way to gain exposure is through infrastructure companies that participate across the crypto market rather than depending on the performance of a single token.

Coinbase Global (NASDAQ: COIN)

In crypto, Coinbase is an attractive investable option, offering infrastructure-level exposure to cryptocurrency trading, custody, staking, and broader on-chain participation rather than exposure to one supposedly sustainable token.

Coinbase is not a “green” crypto investment, but it provides a much better choice thanks to its business capture across the interconnected market described by the research.

That said, the study matters to COIN investors because it suggests that differentiated altcoin categories remain connected to Bitcoin sentiment and macroeconomic shocks, which can influence trading activity, assets held on-platform, investor risk appetite, and demand for institutional risk-management services.

This can be seen in the exchange’s recent financial results, which missed expectations across almost every major financial metric.

For Q2 2026, Coinbase reported $1.22 billion in revenue and $208 million in adjusted EBITDA, as weaker trading volumes and lower crypto prices negatively affected transaction revenue, which came in at $599 million, as well as subscription revenue, which totaled $555 million.

A loss of $359.5 million, or $1.36 per share, for the quarter ended June 30 was also reported.

Coinbase reported an increase in its share of global cryptocurrency trading volume for the third straight quarter, reaching a record 10.3%, up from 6.4% in Q4 2025, when the exchange reported $5.2 trillion in total trading volume for the full year.

Discussing this all-time-high market share in crypto trading, CEO Brian Armstrong said during the company’s earnings call that it proves Coinbase can perform in any market condition.

“Coinbase is no longer a bet just on the price of bitcoin. All of financial services are getting updated by crypto, whether that’s trading or payments or lending, and Coinbase is the best-positioned company in the world to power this.”

– Armstrong

Meanwhile, analysts at Cantor, Benchmark, Clear Street, and Oppenheimer highlighted the record share as evidence that market stress is driving trading activity to consolidate on major regulated platforms.

While Coinbase is trying to diversify through newer businesses, they aren’t yet large enough to offset weakness in the company’s core trading revenue.

For instance, derivatives volume came in flat, prediction markets surpassed a $100 million annualized revenue run rate, and stablecoin revenue fell to $292 million, but paid subscribers to Coinbase One surpassed one million.

“We’re just continuing to execute on what we can control, and we’re performing well underneath the hood,” CFO Alesia Haas told CNBC. “The Coinbase One numbers are growing despite overall macro downturns, which demonstrates the adoption rate of this product, and we’re shipping faster. So the ‘Everything Exchange’ is working … We’re starting to see the signs that they will have tangible results on our economics.”

A key measure of whether the exchange can generate more stable revenue through cycles is subscription and services revenue, which includes institutional services, Coinbase One memberships, custody, staking, and USDC interest income. It reached 48% of total net revenue in Q2.

Coinbase also renewed its Circle partnership for USDC on existing terms, removing a key concern for investors.

Moreover, during Q2, the exchange added 819 BTC to its balance sheet, increasing its holdings by 5% QoQ and bringing the total to 17,211 BTC.

The disappointing Q2 figures caused COIN to drop almost 15% to just under $140. As of writing, it is trading at $146.50, down 35.22% YTD and 54% over the past year.

Coinbase has a $38.65 billion market cap, an EPS (TTM) of -3.86, and a P/E (TTM) of -37.99. Some market analysts see more pain ahead for Coinbase shares, not only due to crypto winter but also due to the stalling of the CLARITY Act in the Senate. But Armstrong is “pretty optimistic that it’ll get to a full Senate floor vote.”

“There’s a lot of last-minute negotiations happening, which to me is a sign that everyone is invested in getting something over the line,” he said during the earnings call.

But even if the bill doesn’t pass, the CEO said it will be “business as usual for Coinbase,” as they “already do many of the things that would be required by the CLARITY Act,” adding that “it’s really the American consumers… who would lose if CLARITY doesn’t pass,” and “Coinbase would be fine.”

Conclusion

Bitcoin’s energy consumption and carbon emissions have long been a point of contention, giving rise to energy-efficient cryptocurrencies. But while these coins may have solved crypto’s energy problem at the protocol level, they haven’t changed how markets price these assets.

For now, Bitcoin continues to guide investor sentiment and valuation, which means environmental innovation alone has yet to reshape crypto’s financial architecture, leaving sustainable cryptocurrencies subject to the very same forces that drive the broader digital asset ecosystem.

At the same time, oil-price shocks can increase the probability of abrupt instability, demonstrating that cleaner consensus mechanisms do not isolate these assets from the broader energy-finance system.

References

1. Qanas, J., Benlagha, N. & Shahrier, N. A. The investigation of the asymmetric influence of Bitcoin and energy prices on sustainable cryptocurrency valuation. International Review of Economics & Finance, 110, 105603 (2026). https://doi.org/10.1016/j.iref.2026.105603