Martin Weiss on Weiss Ratings’ New Data-Driven Crypto Ratings
Weiss Ratings, an independent rating firm for stocks, mutual funds, cryptocurrencies, ETFs and financial institutions, has made another major push into the digital assets space with its new data-driven rating system.
Major new report by Weiss Crypto Ratings: Despite bad markets, adoption of leading coins has improved dramatically, powered by stronger technology. https://t.co/hnjoapQOI3 #crypto #bitcoin #altcoins #XRP #ADA #BTC #BCH #ETH #EOS #XLM #XMR
— Weiss Ratings (@WeissRatings) March 26, 2019
The new model combines two major elements: a Tech/Adoption grade for long-term investors and a Risk/Reward grade based on short-term factors. In this model, Weiss breaks down everything from trading patterns to on-chain transactions.
While most of the top cryptocurrencies by market cap earn high marks from a technology and adoption perspective, the current risk/reward ratings paint a somewhat different picture. Combining the two metrics results in Bitcoin (BTC), XRP, EOS (EOS) and Binance Coin (BNB) all coming in first with a B- overall rating.
Dr. Martin Weiss, the founder of Weiss Ratings, co-developed the ratings alongside chief cryptocurrency analyst Juan Villaverde. In a recent interview, Weiss told us that delegated proof-of-stake (DPoS) coins on the rise, while proof-of-work (PoW) coins are losing market share. However, Weiss and Villaverde emphasized that the digital asset landscape is ever-evolving and trends could change as new technologies emerge.
In terms of current technology and adoption ratings, Weiss highlighted the following observations for the top-5 cryptocurrencies in his write up:
1. XRP, managed by Ripple, is best positioned to compete with SWIFT, the global network for interbank money transfers. Tech/Adoption Grade: A
2. EOS is currently the leading cryptocurrency challenging Ethereum to become the backbone of the new internet. Tech/Adoption Grade: A
3. Bitcoin, upgraded with the roll-out of its Lightning Network, is the best positioned to become a popular store of value for savers and investors. Tech/Adoption Grade: A
4. Ethereum is the most widely used smart-contract platform, but currently faces difficulties with scaling. Tech/Adoption grade: A-
5. Cardano aims to provide the most advanced smart contract capabilities, monetary policy and governance. Tech/Adoption Grade: B+
According to Weiss, he designed the ranking system to appeal to both members of the traditional finance world and heavy-duty crypto enthusiasts.
“Without those two coming together, neither will succeed in the long run,” Weiss said. “The institutional banking world will run into trouble if they can’t understand blockchain and distributed ledger technology, and the cryptocurrency world will run into trouble if they can’t figure out how banks work.”
Weiss Crypto Indices
Moving forward, Weiss plans to leverage the new data-driven rating model for a number of services and products. In addition to providing consulting to institutions hoping to better understand the space — he does this for free up to a certain point — the team has also developed a suite of crypto indices.
Weiss’ indices, which went live this week, are largely focused on the top-50 cryptocurrencies by market cap that passes the Weiss ratings standard. Additional indices are broken out by consensus model, such as PoW. Ultimately, Weiss plans to explore derivative products via institutional partnerships sometime in the future.
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.