Weiss Ratings, a US-based independent rating agency had earlier released grades for a number of cryptocurrencies. And surprisingly, Bitcoin didn’t fare well in the rating. The US-based rating agency which grades around 55,000 institutions and investments had released the crypto ratings on 24 January 2018. In which Bitcoin scored average while some other altcoins like ETH and Cardano scored higher.
Weiss’s rating of C+ for Bitcoin put it into a lot of controversies and hate from the crypto market. Getting an average grade from such a big finance company shouldn’t be surprising though. Bitcoin has been a center of hatred and controversy for a long time in global finance. Jamie Damon has had numerous unpleasant things to say about Bitcoin in the past. Bitcoin also faced lots of hate at World Economic Forum that took place in Davos. This is unsurprising considering they are the “old guard” who have the most to lose by Bitcoin’s success.
Joseph Stiglitz said of Bitcoin at the WEF: “We have a good medium of exchange called the dollar. We can trade in that. Why do people want Bitcoin? For secrecy”. Even Former US Secretary of State John Kerry showed his apathy towards the digital currency stating that: “People are investing in it, its serious amounts of money and it’s got value so it’s going to be talked about.”
After the grading was released, a number of Bitcoin’s supporters attacked Weiss’s website. The agency stated in its released statement that their staff was up all night fending off denial of service attacks from Korea. Eventually, the hackers did break into the website and distorted the stolen information on social media.
Reason for rating Average
Bitcoin has the largest network effects, greatest brand recognition and highest market cap of any digital currency. Despite this, Weiss ratings ranked it at C+. While projects like Cardano which essentially exists only as a whitepaper was ranked higher at B. The reason given by Weiss in its statement for this is: “Bitcoin is encountering major network bottlenecks, causing delays and high transactions costs. Despite intense ongoing efforts that are achieving some initial success, Bitcoin has no immediate mechanism for promptly upgrading its software code.”
No A grade in ratings
According to Weiss, they won’t give out that grade until the amount of volatility within the cryptocurrency sector dies down. They stated:
“That’s the number one source of misunderstanding between our model’s results and the grades that most folks in the cryptocurrency space expected: That big price volatility! That’s the main reason we have no A’s on our list right now.”
However, it’s unclear what price volatility has to do with the technical or fundamental merits of any particular coin. If stability is the only key to getting an A grade, then Tether would have outranked everybody. In conclusion, many questions have been raised regarding the company’s methodology and rating system.