Weiss Ratings, the first financial ratings agency to rate and review cryptocurrencies in addition to rating traditional stocks and financial institutions, has released their updated list of cryptocurrency ratings.
The company recently reviewed more than 3,000 cryptocurrencies and gave ratings to over 111 of them. Out of all the recent ratings, only 4 cryptos were given a “Buy” rating (B- or higher) — XRP, Stellar, Cardano, and EOS.
How Weiss Rates Cryptocurrencies
According to Weiss, they base their blockchain ratings on a number of metrics:
- Technology Model: the measurement of blockchain technology used and its potential for performance. How fast can the blockchain process transactions? Is the blockchain able to scale? How advanced is its governance model? Can smart contracts be integrated on the ledger? How does it deal with energy consumption? Can the blockchain be easily upgraded? Does the project have unique features?
- Adoption Model: the measurement of the blockchain’s performance in the real world. What are its current transaction speeds and costs? How decentralized is the network? How many developers are working on the project? Is the project popular? How much, if at all is the project being used?
- Investment Risk Model: the measurement of volatility and potential downside risk. How much money can be lost? What are the market conditions? Does the project appear to be overvalued?
- Investment Reward Model: the measurement of upside potential. How much money is there to be made? Is the project undervalued? What is the price relative to coin supply, market cap, etc.?
Based on the parameters above, Weiss Ratings gives each coin a grade from “A” to “E.”
A coin is considered a “buy” when it holds a grade of “B-” or higher. A coin is considered a “sell” when its grade is “D+” or lower. If the grade is a “C” the coin is considered a “hold.”
XRP, XLM, ADA and EOS Rated As “Buys”
In Weiss’s recent ratings, XRP and Stellar were labeled “buy” because they scored high on the “technology model” metric with their high transaction speeds.
EOS and Cardano were labeled “buy” based on their “adoption model” metric in regards to strong communities and app-building capabilities.
As for Bitcoin, it received a “C” grade or “hold” status. Weiss graded Bitcoin this low due to “outdated technology, including slow transaction speeds, difficulty in scaling, weak governance” and “poor risk/reward metrics.”
This recent “C” grade is the same rating Bitcoin received back in January, and many people in the cryptocurrency community completely disagree with this rating.
For instance, Charles Hoskinson, the founder of Cardano and IOHK, came out in defense of Bitcoin and took his frustration to Twitter:
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
— Charles Hoskinson (@IOHK_Charles) January 24, 2018
We want to know what you think of the Weiss Cryptocurrency Ratings. Is Bitcoin deserving of a “C” rating? Do you think coins like XRP, Stellar, Cardano and EOS deserve to be rated higher than Bitcoin? Let us know what you think in the comment section below.
