Weiss Ratings will begin rating cryptocurrencies on January 24th, according to the above announcement found on their home page. Known for its stock, ETF, mutual fund, bank, and credit union ratings, Weiss is now becoming the first ratings agency to venture into digital currencies. It will add over 1,000 of these coins and tokens to its current arsenal of over 55,000 institutions and investment vehicles.
Weiss differentiates itself from mainstream agencies like Moody’s and Standard and Poor’s by providing truly accurate and unbiased financial reports. It boasts a solid record dating back to 1971, and now the crypto community can share in its success. Not only will it rate Bitcoin, but many of the altcoins as well. It listed Ethereum, Ripple, Bitcoin Cash, Cardano, NEM, Litecoin, Stellar, EOS, IOTA, DASH, NEO, TRON, Monero, and Bitcoin Gold along with ‘many others.’
How much of an impact will this have on crypto trading?
Bitcoin’s recent success has led to record interest in cryptocurrencies. It receives mainstream attention nearly every day at this point, and as a result, many novice investors have become inextricably involved. Many of them do not do prudent research prior to buying, and some of them have been burned as a result. Weiss intends to solve this to an extent by providing transparent coverage on many coins/tokens of interest. Potentially, it can be a one-stop resource for investors who wish to verify their picks with a professional opinion.
Weiss assigns a rating of A through F for each entity that it covers. This helps investors know at a quick glance if it is considered solid investment material or not. Additionally, it evaluates 6 critical rating factors on a scale of ‘Very Weak’ to ‘Very Strong.’ These factors include growth, efficiency, solvency, total return, volatility, and dividend. Some of them do not apply to crypto in some cases, so it will be interesting to see how the agency adjusts its summary.
Will Weiss make hype-crazed crypto a legitimate venture?
Don’t try to deny it, most crypto investment is hype-driven. Every day brings another pump-and-dump to the scene. A few triple their investment while many buy at the top thinking its the next Bitcoin only to watch it come crashing down. ‘FOMO’ is the word of the day, every day, and we all have it.
Novice investors are easily swayed by social media and its self-proclaimed crypto-heads. Weiss will offer a reputed counterbalance to these influences, and in theory, it will aid novice investors and veterans equitably.
This is not to say that crypto is illegitimate. It is the fastest growing and most forward-looking investment vehicle available. The social media influence, however, does taint the image significantly. Adding to that, the global governmental narrative of crypto suggests that it surrounds and bolsters criminal enterprises. While exceptions do certainly exist, most users and investors in cryptocurrency want nothing to do with those enterprises. We want the utility, the freedom, and the technology. Hopefully Weiss can play a small part in revitalizing the public image by bringing transparency as it intends.
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