Analysts of the cryptocurrency division of the financial rating agency Weiss Ratings presented a new report on emerging trends in the digital asset market.
In particular, the coins were first assigned letter grades derived from a combination of their underlying technology and level of distribution and indicating the likelihood of long-term success of the projects.
Weiss Crypto Ratings is based on two separate assessments:
- indicator of technological development and the level of distribution of cryptocurrency for long-term investors,
- risk / return indicator for the short term.
Considering the indicator of technological development and the level of distribution, analysts concluded that:
- Ripple's XRP is in the best position to compete with the international banking system SWIFT. Rating: A
- EOS is currently Ethereum's main competitor for the status of technology, which will be the foundation of the new Internet. Rating: A
- Bitcoin (BTC) , having received an upgrade in the form of the Lightning Network , has the greatest chances to become a means of value conservation popular among investors. Rating: A
- Ethereum is the most widely used platform for smart contracts , but is currently experiencing problems in terms of scaling. Rating: A-
- Cardano is committed to providing the most advanced smart contract functionality, monetary policy and management. Rating: B +
Also in the top ten cryptocurrencies in the category of technological development and the level of distribution included NEO , Zcash , Litecoin , Stellar and Steem.
“Our rating model gives enough reason to believe that, despite the decline in prices since the beginning of 2018, a significant segment of the cryptocurrency industry has undergone a marked increase in indicators such as transaction volume, network capacity and their security. Equally important, these improvements are based on underlying technologies. Therefore, for those who are willing to take risks, the best time to invest can come very soon , ”said Martin Weiss, founder of Weiss Ratings.
Weiss analysts, however, warn investors not to ignore the risk of losses, which is an order of magnitude higher in cryptocurrency markets than in virtually all other asset classes.
Therefore, the estimates in the overall rating, which takes into account risk and return factors, turned out to be not so high. So, only four coins — EOS, Ripple, Bitcoin, and Binance Coin — got a B- rating, and not a single coin could get an A.
In total, when compiling Weiss Crypto Ratings, more than 120 cryptocurrencies were analyzed, and as the authors of the report Martin Weiss and chief cryptocurrency analyst Juan Villaverde believe, their conclusions will help investors, companies and ordinary users make informed decisions and avoid unnecessary fuss.
Additionally, analysts have identified five key trends that determine the current state of the cryptocurrency industry:
- A significant part of the industry is experiencing significant growth in terms of transaction volumes, a key aspect of the adoption of cryptocurrencies.
- Wider adoption is due to improved technologies.
- There is a rapid change in the way networks are secured. Coins are gaining popularity based on the Delegated Proof-of-Stake (DPoS) algorithm, while Proof-of-Work (PoW) based coins lose their market share.
- Some cryptocurrencies are completely outside the blockchain .
- Decentralized killer applications (Killer dApps) will play the greatest role in determining future winners. Examples of such applications include:
- decentralized and cryptocurrency-based social networks;
- p2p lending;
- fair (fair) and safe elections.
Martin Weiss noted that Weiss Crypto Ratings will be updated every week, including a detailed analysis of all the above-mentioned main aspects – technology, distribution, risks and profitability. Also, the first of its kind price indices will be launched, which will be based on the cryptocurrency rating .
Alternatives and speculations
Additionally, the head of Weiss Ratings called the emergence of other cryptocurrency ratings a positive development, for example, published by the China Information Technology Industry Development Center (CCID).
"It is always good when there are several points of view, and investors have the opportunity to choose from alternative options ," said Martin Weiss.
He also commented on the assumptions periodically distributed in social networks that such ratings can be stimulated financially by any projects.
“Unfortunately, we all know that in the world of cryptocurrency there are a lot of speculations and the desire to artificially promote your project. Weiss Ratings has been operating in the market since 1971, and I can assure you that for all these years we have never taken any money for the “necessary” ratings. We always give the most fair and based on impartial data results , ”added Martin Weiss.
Recall that in January, an analyst at Weiss Ratings said that the bearish market in 2018 knocked out “weak hands” from the game, which opens Bitcoin to new price highs.
Publication date 27.03.2019
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