Crypto-currencies : the notes of Weiss Ratings are reliable ?

On 24 January, the american society of ratings Weiss Ratings became the first to note the crypto-currencies. The list, however, has caused a lot of stir on the Internet, some wondering on what criteria the crypto-currencies rated have been chosen, or the motivations hiding behind the ratings.

The system of ratings of Weiss Ratings

The rating agency, based in Florida, uses a system of letters ranging from A to E, with A being the best rating and E the worst (A = excellent, B = good, C = acceptable, D = poor, and E = very low). Each letter may be qualified by a ” + “or u” – “. No crypto-currency has not received the note A. But the fans of cryptos be reassured : Weiss is famous for assign only very rarely its best rating, regardless of the type of assets that it evaluates.

Bitcoin noted C+

The undisputed reference in the complex crypto-currency, Bitcoin, has been awarded the grade of C+. Ethereum, 2nd in terms of market value, was rated B. The rating agency has justified its choice by the problems of speed and expense of high transaction of Bitcoin. Nuisances that are much less important on the network Ethereum, and thus warrant the higher rating assigned to ETH.

The best of the class : Cardano, NEO, Steem and EOS

Of the 64 crypto-currencies which are noted, in addition to Ethereum, only EOS (B), Cardano, NEO, Steem (B – 3) were assigned to the ” good “. All the others have been noted from D to C+. We can mention Stellar (C), Ripple (C), Monero (C), etc.

The bad pupils : the alts that are little known

A lot of crypto-currencies evaluated were rated D+ or D. PotCoin, Rise, Quark, Expand, Matchpool and SaluS are a part of the bottom of the basket.

Pixabay – Typograpgyimages

Weiss Ratings, the victim of an attack and critical

Even if it is impossible to please all the world, the publication of this list caused a lot of turmoil on the canvas. The site of Weiss Ratings has been the subject of a DDoS attack (from Korea) a few hours before the publication of the list. Fakes have been circulated on the Internet. When the list of legitimate became known, many critics have battered the credit rating agency.

The next day, Weiss has even had to split a ticket with proof on his blog, titled ” Why some of our notes seem to be weird “. The agency explained that no Has not been awarded due to the high volatility that hits the market of crypto-currencies. Weiss also promises that in the future the note will be detailed for each of these 4 categories :

  • Risk
  • Reward (financial potential)
  • Technology
  • Fundamental
  • These nuances should allow to better identify the potential of all crypto-currencies displaying the same note.

    On what criteria are the currencies noted have been selected ?

    However, there is a question that has not been clarified to my knowledge by Weiss Ratings. To know what are the criteria that were used to define the list of crypto-currencies noted. For example, you may be surprised not to see IOTA in the list, which is yet a member now standing in the top 15. Almost all cryptos type DAG are in the list (XRB, BYTE), except the main one. What is Feathercoin, to the 250th place in the ranking of the values of the market, in this list of less than 70 crypto-currencies ? The logic would have wanted that Weiss selects the cryptos rated on the basis of the classification of the market value. This is clearly not the methodology that has been adopted and which seems to be subjective.

    These ratings “cryptos” Weiss, are they useful ?

    From my point of view, no. The rating agencies really don’t have the reputation to be reliable or visionaries. For example, Lehman Brothers was rated AAA just prior to its collapse. It is quite legitimate to want to take a look at the list out of curiosity. But to base its decisions on this kind of information, there is a margin.

    The publication of these notes has, however, brought good news. The fact that a rating agency, even if it is a minor player in the sector, focuses on the market of crypto-currencies is a positive factor in terms of credibility and legitimacy. These are mainly investment companies and institutional investors who use such services. This could therefore encourage them to invest in crypto-currencies.

    Source : Weiss Ratings, CNBC