Wall Street may eventually see itself investing money in virtual currencies. Bitcoin and a number of other virtual currencies were rated this week by a U.S. rating agency opening the possibility that more investors may now want to participate in the virtual currency market.
A letter grading system for virtual currencies was issued on Wednesday 24th January by a private American rating agency known as Weiss Rating. The Florida based rating agency issued ratings for various virtual currencies including the market leader Bitcoin (BTC), ethereum (ETH), Ripple’s XRP, bitcoin cash (BCH), cardano (ADA), NEM (XEM), litecoin (LTC), stellar (XLM), EOS, IOTA, Dash, NEO, TRON, Monero (XMR), bitcoin gold and the list continues.
In a surprise announcement, Bitcoin was rated as ‘fair’ with a C+rating, while ethereum received a B rating representing ‘good’.
Weiss Ratings in a statement explaining its approach said Bitcoin’s ‘fair’ ratings were as a result of challenges the Cryptocurrency is faced with especially due to the long times it take to conclude transactions, the high transaction fees as well as the absence of any planned upgrades by Bitcoin to its infrastructure.
Weiss Ratings was established in 1971 and has since graded close to 55,000 organisations including credit unions, insurance companies, stocks and mutual funds. In contrast to other rating agencies such as Standard & Poor’s, Moody’s, Fitch and A.M Best, Weiss argues that it never accepts payments from any institutions that they rate.
This was the first virtual currency grading system ever. The rating is envisaged to help alert traders to better analyze the risks attached with a particular virtual currency before final trading is completed.
CoinDesk reported that Bitcoin appreciated by 1 % by midday Wednesday, the day Weiss released its ratings while ethereum gained a 3% in value. Not one of the 74 Cryptocurrencies that were rated by Weiss received an A grade.