On Friday (February 7), Weiss Crypto Ratings, a division of Weiss Ratings, the world's only financial rating agency providing grades on cryptocurrencies, said that it had upgraded the overall rating for Bitcoin to "A-" (i.e. excellent).
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.
Why Upgrade Bitcoin's Overall Rating Now?
Weiss Crypto Ratings says that it upgraded Bitcoin's overall rating to "A-" due to "improving fundamentals" and the expectation that Bitcoin's price action will only improve as we approach May 12, which is when Bitcoin's next block reward halving should be taking place.
What should make anyone owning Bitcoin even more excited is the prediction that the Bitcoin price will go even higher than it did back in December 2017 when it reached its all-time high of nearly $20K:
#Bitcoin, recently upgraded to A-, should surpass its 2019 high, confirming the new #BTC bull market that began in December of 2018. But first, don’t be surprised if $BTC suffers a short-term correction.— Weiss Crypto Ratings (@WeissCrypto) February 7, 2020
Another major cryptocurrency that Weiss has had a recent upgrade to its overall rating is Ethereum (ETH), which (like Bitcoin) has gone from "B+" to "A-", which means that Bitcoin and Ethereum are the highest rated cryptocurrencies:
Also, on February 7, in Weiss Crypto Alert, the newsletter that Weiss Crypto Ratings sends out by email to subscribers three times a week, Juan M. Villaverde, who is an econometrician and mathematician, said that currently crypto is "in the early stages of a bull market" and that "crypto assets are gearing up for a potentially spectacular 2020."