While Bitcoin (BTC) has been in existence since 2009, it has stayed primarily under the radar. That changed in 2017 as the price of BTC moved from $1000 in May to almost $20,000 by December. Along with that surge in price, other cryptocurrencies were introduced — about 320 ICOs from April 2017 to March 2018. These altcoins have provided investors with alternative ways to take part in the space.
However, the challenge is knowing which cryptocurrencies are safe bets for the long run. Weiss Ratings, a research firm that has been analyzing financial investments for over 30 years, has come up with a list of five digital currencies that they rate as safe investments.
Weiss grades financial instruments by using four different indexes:
– Price volatility
– Relative and absolute price-performance
– Underlying technology
– Fundamentals such as scalability, transaction speed and acceptance by developers and the public
When these four indexes are combined, Weiss comes up with a final grade that ranges from A (excellent) to a grade of E, which is (very weak).
It must be noted that no cryptos that were rated received an A rating. Weiss pointed out that cryptocurrencies are still in the early stage of adoption. The space is still in its infancy and no single crypto can be thought of as being “safe.”
Safe Cryptocurrencies Rated As Good
Five cryptos rated by Weiss as being “good” candidates for investors include the following:
Bitcoin – the largest crypto with the biggest market cap at around $129 billion.
Ripple – located in the top 10 cryptocurrencies with a market cap near $24 billion
EOS – also located in the top 10 cryptocurrencies with a market cap close to $11 billion
NEO – located in the top 20 cryptocurrencies with a market cap near $3.5 billion
Steem – the smallest crypto on the list with a market cap of $619 million
Other Popular Cryptos Ratings
The market cap of cryptocurrencies changes on a daily basis as traders buy and sell each coin. Some of the popular coins with high market caps that didn’t make the list include Ethereum, Litecoin, IOTA, Stellar, Cardano and Bitcoin Cash.
Based on market cap, Ethereum is the second-largest digital currency in the world with a market cap of $57 billion, which is over twice the amount of Ripple. However, when Weiss calculated grades, this large crypto earned only a “C+.” That gives this crypto a “fair” rating.
IOTA, Stellar, Cardano and Litecoin also came in with a C+ rating. They have market caps equal to the following:
IOTA – $4.9 billion
Cardano – $5.8 billion
Stellar – $5.5 billion
Litecoin – $6.7 billion
Bitcoin Cash was rated as one of the weakest with only a “D+” rating, which is considered “weak” on the Weiss rating scale.
Cryptocurrencies that received low D and E ratings included Auroracoin, Electroneum, PotCoin and Megacoin. These names have had trouble staying above the $10 mark. These coins are typically traded by speculators who have higher risk/reward thresholds.
Backlash Regarding Ratings
Of course, when a list like this comes out, there will be many individuals who have their criticism. That’s to be expected as people have different feelings and emotions regarding their investments. The true test will come in the future when these cryptocurrencies have to prove their value. Just like stocks, they will be bought and sold based on the emotions of buyers and sellers. If people think that they are good deal, they’ll stay at the top of the heap.