EOS (EOS) and Ethereum (ETH) Are “Good”, Bitcoin (BTC) and Ripple (XRP) Just “Fair”
On January 24th, financial ratings agency Weiss Ratings came out with the first ever cryptocurrency grades awarded to cryptocurrencies. The very first report rates 74 of the most popular cryptocurrencies in the market currently, from a scoring scale that ranges from A to E. Accordingly, EOS (EOS) and Ethereum (ETH) scores above the rest with a B rating followed by Cardano (ADA), NEO (NEO), and Steem (STEEM) at B-. Other popular cryptocurrencies such as Bitcoin (BTC), Ripple (XRP), Bitcoin Cash (BCH) and Litecoin (LTC) were rated below these, much to investor surprise at the crypto-markets yesterday!
Weiss Crypto Ratings
While assessing these ratings, investors should keep in mind:
(a) The Weiss cryptocurrency rating scale (image above) which differs from the usual stock rating scales, and
(b) The four key indexes on which the Weiss cryptocurrency ratings are based, each of which assesses:
- the risk (price volatility),
- the reward (return fluctuations),
- the technology (infrastructure and flexibility), and
- the fundamentals (currency specific factors, market, and public support) of each cryptocurrency separately.
Ethereum (ETH) and 4 Others Ahead of Bitcoin (BTC)
Soon after the ratings were out, a lot of the media buzz was around:
- Ethereum (ETH), EOS (EOS), Cardano (ADA), NEO (NEO), and Steem (STEEM), all being rated above Bitcoin (BTC) and Ripple (XRP)
- Why Bitcoin is not an A? Weiss Ratings says it fell short on the risk and technology index.
- Why Ripple (XRP) fell short of even a B? Weiss Ratings says it wasn’t able to bag an A rating on the technology index on account of heavy centralization and control by its creators.
The chart above gives a quick view of where the top 10 cryptocurrencies lie on Weiss Ratings’ assessment. For the detailed report, click here.
2 Caveats Investors Should Understand
Assessing the media buzz and investor concerns that their report prompted, the company shortly followed up with a release stating certain caveats to their ratings, two of which could really help an investor differentiate these from the usual stock rating scales:
- The cryptocurrencies do not have to achieve an A grade to merit interest by investors. A “B” or even “B-” also qualify as the investment rating equivalent to “buy.” At the same time, investors should not be overly alarmed by a “C” rating. It is a passing grade; and for investors, implies the equivalent of “hold.”
- Also, investors should expect frequent upgrades and downgrades to these ratings.
We will keep you updated on these ratings. Meanwhile, do drop us a message in comments below, telling us your opinion of the Weiss ratings verdict!