- Bitcoin has fallen short of B rating by Weiss cryptocurrency rating
- The rating system is ranked from A to E with ‘B’ meaning ‘buy
- The only coins ranked at a B are XRP, Stellar, EOS and Cardano.
There are thousands of cryptocurrencies in existence and as a result, consumers might be confused as to which ones are valuable and worthy of purchase and which are not. There are a number of rating platforms and systems that review cryptocurrencies and grade them, one of which is Weiss cryptocurrency rating.
The Weiss rating has analyzed over 3,000 currencies and has given ratings for over 111 of them.
Four factors
Currencies are reviewed and rated based on four models which are: technology, adoption, investment risk, and investment reward model.
The technology model measures the potential performance of the coin and takes into consideration its compatibility with smart contacts, energy consumption, and other features. A way to look at it, according to Weiss, is to compare it to the way mobile phones are rated based on speed, screen resolution, and battery life.
The adoption model focuses on the performance of the coin in real life. This considers how much it is used for transactions by people, transaction speeds and how decentralized the network is.
The investment risk model pays attention to the downside of investing in the coin and how much loss could potentially be made while the investment return model looks at the upside of trading in the currency and how much can be made.
At the end of the day, the coin is rated on a scale of A to E.
‘Any grade of “B-” or better is the equivalent of a “Buy.”
“D+” or lower is “sell.”
And “C” implies no action — “hold” if you already own it; “avoid” if you don’t.’ says Weiss.
Bitcoin in the C
interestingly enough, Bitcoin, the world’s most popular cryptocurrency, doesn’t have a ‘B’ rating but a C.
When asked about it, Weiss said that the reason for this is the fact that Bitcoin has Poor risk/reward metrics, outdated technology, including slow transaction speeds, difficulty in scaling and weak governance.
All these could change with the new lightning network, but that will a take time.
Currently, only four coins are rated as ‘buy’-XRP, Stellar, EOS and Cardano.
Ironically, Charles Hoskinson, the creator of Cardano and a founder of Ethereum has criticized the rating, saying:
”Any rating that doesn’t give Bitcoin an A has got some screws loose. Nearly ten years of wealth creation, innovation, massive growth, proven resiliency against crashes and billions worth of infrastructure. And all without a leader. Bitcoin is the standard.”
