The thinning of ice definitely affects the water cycle, particularly the condensation process. This is where liquid molecules that have turn into gas will collide within the atmosphere causing it to turn into liquid molecules again which results to precipitation. The more ice melting, more precipitation may occur and it may cause several natural disasters that can be destructive.
Algal bloom is definitely good for the Arctic as these algae provide nutrition for several smaller species that dwell at the closed to the surface of the ice, like shrimps and krills.
