On March 26th, Weiss Cryptocurrency Ratings , a division of Weiss Ratings, the world's only financial rating agency providing grades on cryptocurrencies, released the March 2019 edition of the "Weiss Cryptocurrency Outlook" report, which aims to help investors by rating 122 cryptocurrencies using the following evaluation criteria: technology, adoption, risk, and reward. In this article, we highlight a few of the most interesting findings of this research.
Financial ratings agency, Weiss Ratings, which was founded in 1971, started covering cryptoassets (tokens and coins) on 24 January 2018, when it launched a new website called Weiss Cryptocurrency Ratings. The idea was to provide a weekly paid report that gave an overall rating for each cryptocurrency (initially only 74 were covered), as well as two component grades: an "Invest Risk/Reward" grade and a "Technology/Adoption" grade. Grades range from A+ (best) to F (worst).
Weiss Ratings says that these grades should be interpreted as follows:
- A: "excellent"
- B: "good"
- C: "fair"
- D: "weak"
- E: "very weak"
- F: "failed" or "fraud"
Here is what the three types of ratings mean:
This is "a comprehensive, balanced overview of all factors, based on a complex algorithm — not an average of the component grades. When making choices, investors should focus primarily on this overall rating."
Investment Risk/Reward Rating
Risk shows "the downside potential investors should be aware of, reflecting price volatility and magnitude of recent declines" while Reward indicates "profit potential based mostly on price momentum and recent returns to investors". The combined grade for investment risk and reward might be a useful tool for short-term trading.
The two components here are Technology, which looks at software capabilities, taking into factors such as "level of anonymity, sophistication of monetary policy, governance capabilities, ability or flexibility to improve code, energy efficiency, scaling solutions, interoperability with other blockchains," and Adoption, which takes into factors such as actual real world performance (e.g. in terms of transaction speed, network security, and decentralization of mining) and developer/enterprise/public adoption. Here, the combined grade for technology and adoption could be a useful tool for long-term investing.
Cryptocurrencies With the Best Combination of Technology and Adoption
Cryptocurrencies With the Highest Overall Rating
Summary of the Ratings Given to the 122 Cryptocurrencies Covered by This Research
- None received an Overall Weiss Crypto Rating in the "A" range ("primary because crypto price trends have been consistently unfavorable in recent months, generating low scores for risk and reward among nearly all cryptocurrencies").
- Four managed to get an Overall Weiss Crypto Rating of "B-"; these were Bitcoin (which got upgraded from its former rating of "C+" to "B-" mainly due to the rapid growth and improvement of the Lightning Network), EOS, XRP, and Binance Coin (which got such a high score partly due to the rapid increase in its price).
- 27 cryptocurrencies got an Overall Weiss Crypto Rating in the "C" range.
- 75 cryptocurrencies got an Overall Weiss Crypto Rating in the "D" range.
- 16 cryptocurrencies had an Overall Weiss Crypto Rating in the "E" range.
All Images Courtesy of Weiss Cryptocurrency Ratings