Weiss Ratings, which claimed this week it was to be the first company to offer ratings on cryptocurrencies, gave its first assessment on bitcoin and its rivals.
The company, which is one the lesser-known rating companies behind the likes of Moody's and Standard & Poor's, gave bitcoin a C+ rating, representing "fair" and ethereum a B rating, or "good".
Ethereum better than bitcion
Bitcoin was judged only "fair" because it was "encountering major network bottlenecks, causing delays and high transaction costs".
The rating notes added: "Despite intense ongoing efforts that are achieving some initial success, bitcoin has no immediate mechanism for promptly upgrading its software code."
None of the cryptocurrencies it rated received the A, "excellent" brand based on its four ratings criteria, built up as sub indexes:
- Risk index - measuring price volatility over multiple time frames
- Reward index - measuring returns compared to moving averages, benchmarks and other factors
- Technology index - measuring sophistication of underlying source code, governance capabilities, levels of anonymity, flexibility, scaling solutions and interoperability
- Fundamental index - evaluating speed and scalability, market penetration, security, capacity and public acceptance
As mentioned above, none of the digital currencies rated by Weiss received an A rating. Ethereum and EOS were highest with B "good" ratings.
The other two ratings D and E represent "weak" and "very weak" respectively.
Other rating agencies
Capital.com asked two of the big three rating agencies Moody's and Standard & Poor's if they were to follow suit in grading cryptocurrencies.
Moody's said: "Cryptocurrencies, and the underlying blockchain technology that supports them, are a fast-developing area and we continue to evaluate applications of this technology by rated entities through our research".
In afternoon trade on the Bitstamp Exchange, the digital currencies were mixed. After a strong start to the day, the four biggest were lower: bitcoin was down 0.92% to $11,166, ethereum fell 0.44% to $1,043, ripple was 3.5% lower at $1.31 and litecoin lost 1.47% to $178.67.
NEO, ranked B-, gained 0.52% to $134.70 and EOS, ranked B, rose 3.37% to $13.90.