If JP Morgan’s CEO account is anything to go by, Jamie Damon is unhappy with cryptocurrencies. But even more than that, he calls them a fraudulent asset of little value. Perhaps Mr Damon is quite right. Perhaps he is just a bit stroppy that JP Morgan now has its very own Bitcoin-hot special team.
Whatever the reason behind his stern rebuttal of digital money is, we must acknowledge that Wall Street and Rating Agencies are already crowding the field, trying to come up with common guidelines for the field.
Bitcoin is dead, long live Ethereum!
Recently, Weiss Ratings, an agency operating in Florida, released a report, which went so far as to assign ratings to cryptocurrencies separately. This is quite handy in fact, as independent observers, such as ourselves, are quite happy to go through such details and get something back for their investment.
Now, Weiss Ratings used several metrics, including the likelihood of a separate cryptocurrency crashing, technological innovation and other underpinnings of the sector.
Not surprisingly, Weiss Ratings did not so far as to affirm an A rating to any of the available cryptocurrencies currently on the market. But more shocking still, to outside observers still, was the fact that Bitcoin ceded the place to Ethereum. Ethereum loomed larger over both Bitcoin and Ripple, making the statistics a bit puzzling at first glance.
But Weiss Ratings went on to elaborate on their seemingly weir decision:
Thanks to its strong adoption and brand, Bitcoin does merit an A in one of our four indexes. But it falls short in two other important areas: Our Risk Index, and Technology Index. As soon as the metrics on one or both of these improve, an upgrade for Bitcoin is likely.
Could we believe Weiss Ratings?
We in fact can, estimate some, while others raise an eyebrow questioningly. We cannot fault both proponents and detractors.
In a perfect world, we would have easy answers, but unfortunately, we are not living in one. And despite the apparent symmetry of blockchain and cryptocurrencies, we are faced with even more ticklish problems.
According to crypto asset expert David Drake who spoke for Forbes, the ratings issued for the coins and tokens are reliable. Also, the company is largely seen as a pioneer for future endeavors to pin down the total worth of such assets, Mr Drake estimates.
More proponents in the Yes-camp are Head of Computer Analysis at Eliot Wave Elliot Prechter believes that the more down-to-earth adoption of the crypto currencies by familiar financial instruments is a telltale sign for the growing acceptance of these assets.
All those against, raise your hands
Taust Sollus Wealth Management president Al Zdenek has expressed a nuance opinion against Weiss Ratings. Despite his reservations, though, Mr Zdenek acknowledged that agency is a much respected one and generally a company to pay attention to, if only to posit an opposing thesis.
Mr Zdenek does not doubts the current ratings so much as he doubts how tenable those ratings are. In essence, the cryptocurrency is just in its infancy, which opens it to a lot of change.
With the recent spate of attacks on established companies, a new question over the security of such places is also posed. How can we be sure of anything in terms of long-term, lasting effects when it is so easily tackled, on daily basis even.
Mr Zdenek believes that the number of companies going in and out of the sector is so big that it would make little sense to try and pin down the best cryptocurrency companies right now.
Instead, Mr Zdenek estimates that the market should mature more. A more complete estimate can be given only after regulatory framework has been established.