Weiss Ratings will rate cryptocurrecies. Will any coin get an A?

The coinmarket is growing so it is more visible by mainstream, this makes that more people are interesting in. People realize the fast growing of Bitcoin in last quarter and they want invest their money with hope to get profit in near future. Everybody is looking for advices were to invest, people doesn't understand the risk, maybe financial rating will help them better understand the coinmarket.

Weiss Ratings, the nation’s leading independent rating agency of financial institutions, will issue on 24th January 2018 letter grades on cryptocurrencies, including Bitcoin, Ethereum, Ripple, Bitcoin Cash, Cardano, NEM, Litecoin, Stellar, EOS, IOTA, Dash, NEO, TRON, Monero, Bitcoin Gold and many others.

The new Weiss Cryptocurrency Ratings, to be released January 24, are the first by a financial rating agency. They are based on a groundbreaking model that analyses thousands of data points on each coin’s technology, usage, and trading patterns.

Matrin Weiss founder of Weiss Ratings provide some more details how it would look like in interview for CNBS, he said that rating will be broken down into 4 indexes. Two are financial specific and 2 are crypto-specific. For the financial indexes, you have the Risk Index (potential downside) and Reward index (potential upside). Each coin will be graded on its profile in relation to rewards. Nothing crazy here. These indexes are commonly used on stock markets. The crypto specific criteria they’ll be evaluating will be broken down into two additional indexes: Technology and Adoption indexes. Technology index will evaluate the underlying source code and put metrics on how robust it is, flexible it is, and scaleable it is. Adoption Index is determining how much adoption upside a currency/coin has and also have a “security”component, as well as a real-world functionality component. Security will be giving a rating to the of the platforms software risk (I’m assuming: hacking, backdoors, who developers are, etc) And finally the real world functionality will be determined by how much the coin is used in relation to how it’s performing in the real world, and # of transactions per second.

He is assuming that just one or two currencies will be getting A grades. However with recent volatility their model is re-evaluating everything for the worse and there may be no A grades.

Video from his interview for CNBS is here: https://www.cnbc.com/video/2018/01/19/weiss-ratings-starts-grading-cryptocurrencies.html

Associating such ratings with the top cryptocurrencies will bring more legitimacy to the industry as a whole. That can only be considered a good thing, considering that the public still associates cryptocurrency with terms such as “bubble”, “scam”, and “criminality”. Changing these perceptions will not be easy, but with the Weiss ratings, that may change sooner or later. Based on this information alone, it is likely that some of the aforementioned currencies will receive lower ratings than what some people would expect. After all, the current top 20 crypto rankings include several projects with almost no use cases, technologies which aren’t even finished, and trading patterns which are borderline shady.

In may opinion we should pay attention to the upcoming Weiss ratings on January 24th, which will likely have a big impact on the prices of anything they rate, especially if those ratings are low. Might be a good idea to get out of high-visibility coins with a lot of controversy or unfounded speculation. There are some doubts that there would be good for Ripple, more so than other crypto, particularly the scammy ones and the bloated ones. In the interview, Martin Weiss specifically says “real-world tested” currencies will fare better because that’s the because indicator of success.

However Bitcoin Crypto Mastermind wrote on his Twitter: Weiss Ratings is publishing 'grades' for many of the major crypto's on Jan. 24th. The company seems to have a very questionable past so I'm not sure how reliable the rankings will be. It will be interesting to watch for any effect on prices the media coverage will bring though.

Weiss Ratings, which began in 1971, rates 55,000 institutions and investments. Unlike Standard & Poor’s, Moody’s, Fitch and A.M. Best, Weiss never accepts compensation of any kind from the entities it rates. Its independence and accuracy have been noted by the U.S. Government Accountability Office (GAO), Barron’s, The Wall Street Journal, and The New York Times, among others.

I used materials from following sources:

http://finance.weissratings.com/crypto/

https://themerkle.com/weiss-ratings-will-bring-more-legitimacy-to-proper-cryptocurrencies/

http://bitcoinist.com/weiss-ratings-list-crypto/

https://www.reddit.com/r/Ripple/comments/7rn7k3/weiss_ratings_start_grading_cryptocurrencies/

Please comment what you think about this kind of ratings.