N°26-02: Natural Hazards and Digital Finance: The Impact of Solar Storms on Bitcoin Activity

This paper identifies solar storms as an overlooked risk factor in cryptocurrency markets. Because Bitcoin transactions, validation, and mining rely on electricity, internet connectivity, and digital infrastructure, geomagnetic disturbances depress market activity. We develop a step-by-step Artificial Neural Network (ANN) causality test that captures nonlinear, horizon-specific transmission. We formally establish its large-sample properties. Using daily data, we document significant effects that are robust to alternative activation functions and bootstrap inference. The ANN outperforms its linear counterpart, and in 2015 alone, geomagnetic storms were associated with a reduction of $380 billion, valued at October 2025 prices.