Most people are familiar with the concept of financial ratings. Every individual country has its own credit rating, and there are individual consumer credit ratings to contend with as well. In a way, it makes sense for Weiss to issue ratings for cryptocurrencies as well. How this will affect the industry as a whole is difficult to predict. This is one of the most exciting developments we have seen in a while, though.
Introducing the Weiss Cryptocurrency Ratings
Although most people don’t know what to make of the Weiss ratings for cryptocurrencies, it is safe to say this is a positive development. 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.
Weiss Ratings is the United States’ leading independent rating agency for financial institutions. It will soon extend its services to the world of cryptocurrencies. At first, there will be a strong focus on top currencies, which are seemingly determined by market cap as of right now. The list includes Bitcoin, Ethereum, Bitcoin Cash, Stellar, XRP, Dash, Monero, and several others. Each of these currencies will be analyzed thoroughly to determine its individual Weiss rating.
Coming up with such ratings will not be an easy feat. To do so, the company has put together a “unique” model which will analyze each crypto’s technology, usage, trading patterns, and so forth. 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.
Weiss Ratings founder Martin D. Weiss commented as follows:
Many cryptocurrencies are murky, overhyped and vulnerable to crashes. The market desperately needs the clarity that only robust, impartial ratings can provide. We’re proud to be the first to bring that benefit to investors — to help them cut through the hype and identify the few truly solid cryptocurrencies. Our ratings are based on hard data and objective analysis. But they’re bound to create controversy, including some grades that may come as a surprise to some people.
It is certainly true that the cryptocurrency world needs a reality check in some form. More specifically, we see currencies with working technology and solid foundations being overshadowed by “flavor of the month” coins. This trend will need to come to an end sooner rather than later if the cryptocurrency industry is to grow. With half-finished projects soaring to multi-billion dollar market caps, it is evident something is very wrong right now. Whether or not Weiss’s ratings will deter people from hyping up “clutter” in the cryptocurrency world remains to be seen, though.
After all, it will be relatively easy for most people to simply ignore the Weiss ratings associated with certain cryptocurrencies. Since a lot of novice investors have been disregarding common sense for some time, it is only normal that something will have to give. A lot of money has been cut from the total cryptocurrency market cap, partially because of unreliable products reigning supreme. BitConnect is a good example of how things can go awry very quickly when people do not conduct their due diligence. An official rating system will certainly introduce more legitimacy to those cryptocurrencies which people should pay more attention to in the future.