Weiss Ratings Grades Technology High, But Sees Significant Risk
The Weiss Ratings crypto grades show a marked disparity between the technology grade and the potential return on investment.
No matter how powerful the technology, digital assets remain a risky investment with uncertain returns, shows the analysis of Weiss Ratings. The agency shows significant enthusiasm about crypto startups and coins, but is also aware of the increasing pessimism and the threat of volatility.
For instance, Weiss Ratings spoke favorably of Hedera Hashgraph, a newly arrived asset. But the price of HBAR is still down 90% within weeks, defeating the purpose of its intended economic system.
Weiss Ratings, however, has warned that its position on crypto assets is not static, and the grades may shift significantly.
The disparity even for Bitcoin (BTC) is striking. The Bitcoin network receives an A grade - which would not be surprising, given the active GitHub. Bitcoin is also near peak mining, and has survived for more than a decade as the first asset of its kind.
But the risk/reward grade for BTC is a D - highly risky. The reasons for this are multiple, but generally, BTC is capable of swinging between robust growth and crashes. BTC also makes its peak prices within days, but also wipes out as much as 30% of its value about once every few months. An asset with such volatility can lead to deep losses if bought at the wrong time.
This leads to an overall rating for BTC at B-, so far only shared with Ethereum (ETH). All other altcoins, despite their prominent positions, reach a C+ at most. Coins that manage to achieve stagnant and less volatile prices have a slightly higher rating.
Currently, the crypto market is once again seeing small indicators of reawakening for altcoins. But in the past months, smaller assets have shown they can wipe the results of rallies within days.
BTC also fell from the $10,000 tier, so far holding above $8,000. The sentiment around BTC shifts within days, but shows a prevalence of fear over greed. As 2019 is eating into the final quarter, there are no clear predictions on which direction the market would take.
But one thing is true - the market has become more complex and liquid, while absorbing new projects. Regulations are slowly becoming stricter, already with suggestions of monitoring the blockchains themselves and having transparent, non-anonymous token transfers.