Green Crypto and Stock Market Volatility: Assessing the Impact of the 2024 U.S. Election with an Event Study

Abstract

This study investigates how the 2024 U.S. election influences return volatility and investor sentiment in green cryptocurrency and green stock markets, motivated by the heightened global focus on sustainable investments following the 29th Conference of the Parties (COP29). The research analyzes short- and long-term market reactions to the election using event study methodology. Key metrics such as expected normal return (ER), abnormal return (AR), average abnormal return (AAR), and cumulative average abnormal return (CAAR) are calculated to quantify market behavior. Statistical significance is assessed via a paired T-test, with event windows defined around the election date. The 2024 U.S. election significantly impacts green cryptocurrency markets, driving heightened volatility and speculative trading in both short and long-term windows, particularly post-event. Conversely, green stocks exhibit steady long-term growth, minimal short-term speculation, and a rising CAAR trend post-election. This highlights the inherent instability of green cryptocurrencies compared to the resilience of green equities during political uncertainty. The originality of the study lies in its novelty, as this is the first volatility analysis applying event study methodology to check the effect of the USA election 2024 on green cryptocurrency and green stock markets, and offering actionable insights for sustainable finance. The findings advance understanding of how political developments asymmetrically affect emerging and traditional green markets.