Iceland’s Crypto Business. The cryptocurrency business in Iceland is “making strides” but has a long way to go before it realizes its full potential. The country has a lot of untapped potential, including the benefits provided by its distinctive terrain. Met with Gulli Gislason, chief investment officer at the Icelandic liquid token investment scheme Viska Digital Assets, to better understand the possibilities and threats confronting his northern nation.
First, Gislason revisited old ground: the global financial crisis 2008, which had a disproportionately negative impact on Iceland. The government of Iceland responded to the situation by imposing capital restrictions, which limited the circulation of the national currency, the Icelandic króna.
For Gislason, “It opened people’s eyes to cryptocurrencies as an asset class and, of course, blockchain technology as well.” When Baldur Friggjar Óðinsson, a pseudonym of Iceland’s Satoshi Nakamoto, airdropped Auroracoin to 330,000 individuals identified in the national ID database in 2014, it further piqued the public’s attention.
“It was airdropped to all the Icelandic people and anyone interested, but it never became like a big currency or anything,” Gislason explains. Their tokens may be claimed. And a few lucky souls even found a way to turn it into Bitcoin. But Gislason still thinks Iceland has a ways to go before it fully embraces crypto and educates its citizens about it.
Gislason believed that the level of expertise and acknowledgment of crypto as an asset class is still relatively early, even more so than in neighboring countries, even though it” has been managing money inside crypto for about two years. Gislason admitted that we are progressing in raising Iceland’s profile and familiarizing the investment base, albeit we are behind schedule.
Rich in Renewables, Yet Energy Tight
Iceland’s Crypto Business certainly does not lag regarding renewable power. Thanks to its unique geography, over a quarter of Iceland’s power is generated by geothermal energy. The island nation also has significant hydropower and wind power, with 99.98% of its total power supply coming from renewables. “Iceland is a country rich in renewable energy,” Gislason said. Gislason points out that this makes it ideal for Bitcoin BTC $61,619 mining.
“Bitcoin miners are flexible buyers of power and have allowed Icelandic power producers to sell excess energy in recent years, utilizing otherwise wasted energy,” Gislason said. “We don’t have any underwater cables to the mainland of Europe, the United Kingdom, or the United States. So we are a closed electricity system.”
Viska Digital Assets is very familiar with Iceland’s mining industry. Three of its founders are also involved with Greenblocks, a separate Bitcoin mining firm operating in a joint venture partnership with the U.S. miners BitDigital. However, while there is enormous potential for Bitcoin miners in Iceland, challenges also need to be overcome.
“Like all the world, we’ve been making subsidies for imports of electric vehicles, so the electricity demand has increased. Development of new power plants has been minimal due to regulatory constraints, and today, the market is fully tapped with periods of energy shortages,” acknowledged Gislason. These pressures have fed into environmental concerns about the industry.
“This has created a false narrative in Iceland framing Bitcoin miners as being a net negative for the energy industry when they have been a buyer of otherwise unused energy,” asserts Gislason. Gislason is optimistic and believes the tide is beginning to turn as officials wake up to the pressing need for more energy. “We understand now that we have been making too few power plants,” he said.
Viska Digital Assets
Following an overview of Iceland’s Crypto Business, the topic shifted to Viska Digital and the hedge fund’s investing criteria. He argues that the first criterion is investing in tokens with enough liquidity to move about without affecting the price. Concentrating on the market segments that most pique our attention is another criterion. There, the team’s technological prowess shines.
According to Gislason, two of Viska Digital’s six founders are from traditional finance, and the other two are from the technical side. “We prioritize long-term viability, so we place a premium on effective risk management and careful counterparty selection,” Gislason explains, describing how the company’s reluctance to take risks allowed it to stay out of trouble with FTX and Silvergate Bank.
Last but not least, Gislason shares his predictions for the future of the business. Gislason asserts that we have entered the most promising phase of the adoption s-curve. “The time is coming when this becomes significantly more mainstream […], and major players like BlackRock are beginning to engage actively and speak positively about Bitcoin and all the crypto assets […].” I believe the crypto industry has never been more fascinating than it is right now.
