Iceland's Potential in Crypto Industry Underpinned by Renewable Energy: Insights from Viska Digital's CIO
Summary:
Iceland's unique geography and renewable energy capabilities position it as an ideal location for cryptocurrency operations, according to Gulli Gislason, Chief Investment Officer at Viska Digital Assets. Despite the increasing interest, Iceland still lags in crypto acceptance and education. Regulatory constraints have resulted in energy shortages, despite 99.98% of the country's power supply being derived from renewables. Gislason, however, is optimistic about the future, highlighting regulatory shifts and the entrance of major players like BlackRock into the crypto space.
Iceland's cryptocurrency sector is progressing steadily, yet the nation has not fully leveraged its unique geographical advantages and other potential benefits. Gulli Gislason, the Chief Investment Officer at Viska Digital Assets, an Icelandic liquid token investment fund, elaborated on the prospects and hurdles for the crypto market in his frosty homeland.
Gislason discussed the 2008 banking crisis that severely affected Iceland. As a result, the country imposed capital controls, limiting the flow of the national currency, the Icelandic króna. This situation led to a greater awareness and acceptance of cryptocurrencies as an asset class and blockchain technology amongst the Icelandic population.
The interest in crypto was further aroused in 2014 when the enigmatic Baldur Friggjar Óðinsson — considered Iceland's answer to Satoshi Nakamoto — introduced Auroracoin to the nation of 330,000 people. Regardless, the adoption and education about crypto still lags behind, according to Gislason.
Despite this, Gislason is confident about the strides that are being taken to fortify the crypto framework and educate the Icelandic investor community on the potential of these digital assets.
A significant benefit of the nation is its access to renewable energy. Iceland has efficient geothermal power resources. Over 25% of its power comes from geothermal energy, and nearly all its power supply is sourced from renewables. Given the high consumption of electricity in Bitcoin mining, Iceland's access to renewable energy resources makes it an ideal destination for crypto miners. Equally, Gislason notes that the nation has a closed electricity system due to the absence of undersea cables connected to Europe, the UK, or the US.
Notwithstanding the potential for Bitcoin mining, Gislason admits that the demand for electricity is rising, and recent regulations have hampered the development of new power plants. Thus, there are periods of energy shortages, which has led to criticism and misconceptions about Bitcoin miners' energy usage.
However, Gislason remains hopeful that Icelandic officials are becoming aware of the need for enhanced energy resources.
Turning his attention to Viska Digital Assets, Gislason outlines the fund's investment criteria. Tokens with enough liquidity to prevent price influence is crucial, alongside the market sectors they find the most compelling. Also, risk management is a critical aspect of their strategy. For instance, their risk-averse approach spared them from exposure to FTX or Silvergate Bank.
As he looked ahead, Gislason showcased his optimism for the global crypto industry. He anticipates a shift towards mainstream acceptance, signified by notable players like BlackRock becoming more actively involved and positively interpreting Bitcoin and other cryptocurrencies. Gislason believes it's an exciting phase for the crypto sector.
Published At
6/25/2024 4:52:00 PM
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