The Future of Crypto in Iceland Looks Promising, but There Are Many Hurdles

The crypto industry in Iceland is progressing, but has not yet reached its full potential, with several unique geographical advantages still untapped.

Güli Gislason, Chief Investment Officer at Viska Digital Assets highlighted the impact of the 2008 banking crisis that led to capital controls on the Icelandic krona, raising awareness of cryptocurrencies and blockchain technology.

In 2014, Icelanders’ interest in cryptocurrencies grew even further whenBaldur Friggjar Óðinsson(Baldur Friggjar Óðinsson) released Auroracoin to 330,000 people via airdrop from the national private database, allowing many to convert their tokens into Bitcoin.

Despite this development, Gislason believes Iceland lags behind in crypto adoption and education. He noted that while Viska Digital has been managing crypto funds for two years, the sophistication and recognition of cryptocurrencies as an asset class in Iceland is still in its infancy compared to neighboring countries.

Iceland is a leader in renewable energy, with over 99.98% of the country’s electricity being generated from renewable sources, thanks to geothermal, hydro and wind resources. This makes it ideal for Bitcoin mining, where excess energy that would otherwise be lost can be used.

However, increased demand for electricity from electric vehicles and limited development of new power plants have led to periods of energy shortages and environmental concerns, which has put Bitcoin miners in a negative light despite their role in harnessing excess energy.

Viska Digital Assets, whose founders are also involved in Bitcoin mining company Greenblocks, faces challenges but sees potential. Gislason stressed the need for more power plants and highlighted hedge fund criteria for investment: liquidity, market interest and proper risk management. The company is avoiding exposure to risky entities such as FTX and Silvergate Bank by focusing on these factors.

It is optimistic about the future, believing the industry is at an exciting stage of the adoption curve, with major players such as BlackRock beginning to dabble in Bitcoin and other cryptoassets.