This is a welcome development, Iceland Crypto industry shifting to pure blockchain businesses will help in the wide adoption of the blockchain technology and as bitcoin is the most popular of them all, it will affect it's price and adoption positively.
Well not necessarily. It looks like they're going into R&D of blockchain technology applications, so they're not necessarily be going to promote Bitcoin itself. They're going to want to find new uses for it, which may or may not involve cryptocurrencies. I don't think this will help Bitcoin's technological aspect either, unless they somehow find a way for crypto to scale that Bitcoin can use.
Either way, this probably won't have a drastic effect on the crypto space. Mining is still projected to be a thing, it's just that people won't be rushing into it.