Introduction
Weiss Ratings Agency has been around since 1971. It has been providing investment ratings for decades. They have included Google, Microsoft, Amazon, and other popular companies in their ratings.
Now, they have started rating cryptocurrencies which is very good for us. Since rating investments is their expertise, they have hired some experts in the crypto space in order to analyze markets, usage and technologies behind top cryptocurrencies. They also use a groundbreaking model which analyzes thousands of data points on each coin’s trading patterns as well.
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Because of the astonishing profits to investors, the crypto-space generated not only wealth but tons of hype. Millions of non-investors have joined in. Hundreds of self-proclaimed experts have appeared on popular social media platforms and give them advice. But the market still suffers from low standards, shady operators, periodic bubbles and marketing hype. We desperately need a body that can provide clarity by providing only robust, impartial ratings.
We’re proud to be the first financial rating agency to bring that benefit to investors – to help avoid the hype, while identifying the few solid and promising cryptocurrencies that truly merit their hard-earned cash.
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Unlike other similar companies, Weiss Ratings declares that they never accept any kind of compensation from any company or entity it rates. They derive revenue from end users of its ratings such as individual investors and consumers.
The Weis Ratings Scale
Investors should interpret the Weiss Cryptocurrency grade scale with these terms:
A = excellent
B = good
C = fair
D = weak
E = very weak
A plus or minus sign indicates the upper third or lower third of a grade range, respectively. In addition, an F grade is assigned to cryptocurrencies that have failed or are subject to credible allegations of fraud.
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Weis warns about possible misinterpretations of this scale because other rating agencies have a triple A (AAA) rating for “excellent”. In other scales, a rating of B means “junk”. Weiss stated that their ratings are primarily designed for new cryptocurrency investors who are willing to risk investing in assets with extreme price volatility.
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Remarkable Ratings
Here are some remarkable ratings that may affect investors’ confidence either in the coins in question or the rating agency. Some ratings are debated out there so let me just present to you as much information as I can. The ratings are based on four indexes: the reward index, the risk index, the fundamental index and the technology index.
The first Weiss Cryptocurrency Ratings were released on January 24, this year. Bitcoin got a C+ (“fair”) rating which was fiercely denounced by a large part of the crypto community. The grade as overly punishing according to some.
One of the critics was Charles Hoskinson, the creator of Cardano and also a founder of Ethereum. This is what he said:
“Any rating that doesn’t give Bitcoin an A has got some screws loose. Nearly ten years of wealth creation, innovation, massive growth, proven resiliency against crashes and billions worth of infrastructure. And all without a leader. Bitcoin is the standard.” Source
Weiss welcomes industry feedback, and they published a response on their paper. They answered the key question: What constitutes the gap between the “A” rating suggested by Mr. Hoskinson and the C+ given by Weiss for Bitcoin?
Although no rating model can be a perfect replication of the real world, and fundamental disagreements are inevitable, we believe the best way to bridge the gap is to provide greater transparency, beginning with our C+ for Bitcoin. - Weiss
I think the biggest issue is weak hands dominate the Bitcoin market, making it extremely vulnerable to FUD. Bitcoin is the most common and widely-accepted cryptocurrency so it’s really attractive to beginners. Although this is how crowds behave in all markets and will continue to do so, you just need to be smarter than the crowd.
Finally, here is the result summary of four coins including Steem:
• Bitcoin gets C+ for high for security and widespread public acceptance but low grades due to low speed, network bottlenecks and high transaction costs.
• Ethereum, the second most popular cryptocurrency got a B since they say it benefits from readily upgradable technology and faster transaction speed, in spite of having some bottlenecks.
• Novacoin and SaluS bot got a D. -Subpar grades were given due to lack of technological innovation and only small-scale adoption.
Steem
• Steem gets a B+, thanks to “a relatively good balance of moderate strength in nearly all the key factors considered along with a social network feature,” Weiss says.
While Weiss doled out no As, he doesn’t consider himself a hater of virtual money.
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My Conclusion
It is only my opinion (not financial advice) that despite extreme price volatility, many cryptocurrencies have established utilities which are even necessary for them not to be classified as securities. Those coins with actual utility (like Steem) have an edge because it is less speculative and for as long as the blogging platform is there, Steem will remain stable. Bitcoin also has utility but mainly to facilitate exchange. It is the crypto used to buy other cryptos, as Etherium is used for ICOs. For as long a there is “utility”, their value is NOT ZERO.
