Weiss Rating, an independent rating agency is about to deliver a mathematical model to rate the popular cryptocurrencies in the market.
They are building a mathematical model which will consider different factors before giving a rating. According to Martin Weiss, the founder of Weiss Rating, there is a need for such model as it will give traders a comparison point and help them make decisions on their investment.
He further added, “Many cryptocurrencies are murky, overhyped and vulnerable to crashes. The market desperately needs the clarity that only robust, impartial ratings can provide.”
Ratings have always been a useful metric to understand the potential of an asset. The value of the grade improves significantly if a reputed organization does it. Until now, they have successfully rated 55,000 investments and institutes.
All the ratings will be based on hard data rather than the hype surrounding the coin. Many have already started speculating that the ratings can have both positive and negative impact on some cryptocurrencies.
They aim to rate the cryptocurrencies using grade. At the time of writing, they are preparing to rate popular coins such as Bitcoin, Litecoin, Ethereum, Ripple, EOS, Stellar, NEO, TRON and so on.
The rating will be released on January 24. This is the first time a financial institution is rating cryptocurrency. The rating will be provided from A-F. There will be four criteria that will be taken into consideration before giving the final rating. They are as below.
- Risk Index
- Reward Index
- Technology Index
- Fundamentals Index
Dr. Weiss in an interview with CNBC also added, “We have built a computer model that looks at cryptocurrencies from many different angels and proves a rational, rigorous and reasoned research that investors need so desperately in this space.”
Let’s wait and see how the rating system unfolds.