Guide to the Weiss Cryptocurrency Ratings: Useful or Flawed?

Cryptocurrencies have ben growing spil an investment option for several individuals and for institutional investors. Most of them have bot building their own perceptions about what to take into account when investing ter cryptocurrencies. But there wasgoed not a overeenstemming and investors did not have a clear idea about which cryptocurrencies had the best possibilities to succeed spil the market is so crowded and a loterijlot of mis-information and FUD shows up online.

This is where Weiss Cryptocurrency Ratings come ter. Founded ter 1971, they are a well-respected provider of traditional investment ratings who have bot advising people for years on stocks and shares investments. With the explosive growth of cryptocurrencies, they determined to inject the crypto market and produce a similar report for the most popular cryptocurrencies te the market.

Spil always, wij are skeptical when traditional companies attempt to take on the crypto-world, so let’s take a look ter more detail at their report.

Weiss Cryptocurrency Ratings

The main intention behind Weiss Cryptocurrency Ratings is to give clarity to the unregulated and lax cryptocurrency market by providing sturdy and impartial ratings. The company explains that they are the very first financial rating agency that will evaluate cryptocurrencies and benefit investors with better information.

A statement released by the Weiss Cryptocurrency Ratings reads spil goes after:

“We’re proud to be the very 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 specie.”

The official release wasgoed on January the 24 th and 74 cryptocurrencies were evaluated. Bitcoin, the most famous cryptocurrency, received a C+ rating due to the scalability problems that the virtual currency is facing. Clearly, the rating can switch spil soon spil the Lightning Network is released. Besides that, if Segregated Witness (SegWit) is being adopted by the most significant crypto platforms te the market, Bitcoin rating may improve.

To have a clear overview about the rating, the official webstek of Weiss Ratings explains that investors should interpret the Weiss Cryptocurrency grade scale with thesis terms:

Mr Martin D. Weiss, Weiss Ratings founder, explained during an vraaggesprek on CNBC that the agency uses a laptop proefje to rate the cryptocurrencies. The pc program uses four different metrics: risks, prize, technology, and fundamental aspects of adoption and security.

“You can have a fine technology index – all the lumps are te place for a very nice, strong currency,” he commented. “But unless it’s actually reality-tested te the marketplace, it may not succeed, and that’s what this last, fourth index tests.”

Weiss Ratings January and February 2018

Most of the cryptocurrency ratings have bot inbetween C- and C+, to be more precise, 54 cryptocurrencies were located ter the C range. 15 were evaluated among the D range. There were only Five virtual currencies ter the B range and no A or E at all. Ethereum, Steem, Cardano, EOS and NEO where the only cryptocurrencies displaying a green badge inbetween B- and B.

Strangely, Cardano – a crypto project with no working product, spil yet, scored higher than Bitcoin, the original cryptocurrency with a working product used by millions around the world.

Spil it wasgoed the very first cryptocurrency rating, most of the cryptocurrencies were evaluated very cautiously. There wasgoed no clear winner or loser, just some D and B contrasting with the C scale.

The 2nd edition of the rating that wasgoed released on February the 23 rd , the situation wasgoed different. The panorama wasgoed another one. The company released some E and A for the very first time and enlargened the amount of B and D. The table finished ter this way: 49 C, 13 D, 8 B, 7 E and 1 A.

NEO and Bitcoin Controversy

Clearly, the ratings may benefit some cryptocurrencies and investors while harm other projects. This is what happened with NEO and Bitcoin.

The only cryptocurrency with an A rating wasgoed NEO, also known spil the Ethereum of China. NEO is a podium that permits ICOs and clever contracts. At the ogenblik of writing, this cryptocurrency is the 7 th most significant by market capitalization with $7.74 million dollars and a price vanaf currency of $119.02, according to Coinmarketcap.

Spil NEO has received the very first A rating, the company explained that their ratings are based on analysis and mathematical models. The intention wasgoed released after receiving some negative comments from the Bitcoin community.

“Granting NEO an A confirms, ter the eyes of critics, that Weiss – a company with no background ter cryptocurrency – doesn’t understand the industry it is judging. What sort of skewed ratings system places on of the world’s most centralized cryptocurrencies leagues ahead of one of the most decentralized (bitcoin)?”

Bitcoin received, ter February, the same punctuation spil te January, a C+, even after recovering Five procent points of the market share. Bitcoin dominance wasgoed 34% on January the 23 rd /24 th and reached 39% a month zometeen.

Bitcoin is the most significant cryptocurrency spil of today, with a total market capitalization of overheen $200 billion dollars and a price vanaf bitcoin of $11,550 dollars.

Some experts ter the matter agree with the Bitcoin stance towards NEO. They voorkeur that NEO is a centralized network compared to Bitcoin. Evidently, decentralization te Weiss Ratings does not play an significant role spil other factors described before.

Eric Wall, writer at Bitcoin.com explained that NEO uses a delegated Byzantine fault tolerant overeenstemming algorithm, ter which NEO holders select some knots to be te charge of the overeenstemming process. What calls the attention is that NEO has presently just 7 active knots that are run by the NEO foundation.

Ter his Twitter account, Eric Wall wrote:

“So what does NEO use? Supposedly, NEO uses a delegated Byzantine fault tolerant overeenstemming algorithm. This means that NEO holders elect a set of knots to be te charge of the overeenstemming process. Presently that’s just 7 (!) knots run by the NEO Foundation, essentially like Ripple.”

GameCredits, another cryptocurrency with a D+ ter both Weiss Ratings releases has shocked the team behind this virtual currency. GameCredits has a team of overheen 100 members that work regularly on the project, and has established several partnerships with companies such spil Unity.

The ratings did not affect ter a negative way GameCredit’s price. Indeed, after the very first release, the cryptocurrency appreciated 20% te the next days.

Conclusion

Founded ter 1971, Weiss Ratings is helping institutional investors to analyze the cryptocurrency market te a more technical way. The two times that the rating wasgoed released, the cryptocurrency market didn’t seem to react te any particular way. The influence that this rating may have overheen the market seems limited.

With growing rente te Cryptocurrency around the world and more institutions regulating cryptocurrencies, it is significant to have a rating agency that evaluates the most significant cryptocurrencies. Ter the future other significant institutions may embark to release their own ratings, creating a similar system to the one that exist nowadays ter the stock market.

Ultimately, when the ratings have bot operating for a longer period of time, better conclusions and analysis will be available. Investors will compare long time spectacles and have a look at which events had the fattest influence ter the markets and the ratings of the cryptocurrencies.

  • Posted te: Fundamentals
  • Tagged te: bitcoin, Cryptocurrency Ratings, neo, Weiss, Weiss Cryptocurrency Ratings

Posted by Carlos Terenzi

I have a Bachelor’s Degree ter International Relations and I write about Cryptocurrencies and European Politics. I live inbetween Buenos Aires and Wroclaw.

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