What Are The 7 Highest-Risk Cryptocurrencies?

“Although I’m optimistic about the future of blockchain technology, not all digital currencies are equal. They are all risky to some degree.

Until recently, no one has really rated cryptocurrencies for risk. Most investors assumed that aside from the brand-name cryptos Bitcoin, Ethereim and Litecoin, they were all pretty much the same.

Since few know who’s really trading cryptos — and why — there are dozens of reasons to be skeptical. Some traders could be manipulating the market.

That’s why Weiss Ratings, which started out decades ago rating insurance companies, jumped into the crypto rating business, a niche that they pretty much have to themselves at the moment. Their ratings are simple to understand: “A” is the highest and “E” represents “very weak.”

What’s behind the ratings? Weiss considers “each coin’s investor risk and reward plus technology and adoption fundamentals.” Unlike bond-rating companies, Weiss says  it “accepts no compensation of any kind from issuers or sponsors. Its sole revenue source is from the sale of ratings and research to consumers, investors and other end users. ”

Here are Weiss’s seven riskiest cryptos, which means they scored either “E” or “E-” on their scale: Comet, Expanse, Matchpool, Megacoin, Novacoin, Quark and Salu$.

How good are these ratings in evaluating whether these digital coins are worth investing in? I have no idea, since I have no access to Weiss’s method. And I wouldn’t be in a position to evaluate the technical merits of each coin.

Martin Weiss, the founder and CEO of Weiss Ratings, offers these cautions:

“First, don’t bet the farm. Unless you’re a high roller, limit your stake to about 5% of your liquid assets.

— Avoid parabolic surges. I know it’s tempting. But it’s the worst time to buy. Instead, start buying in small increments when the market is down. Then, add a bit more if it falls even further. Given the tremendous future potential of this new kind of money — and this new kind of Internet — it could be a good time to build a portfolio of the best currencies.

— The most-promising cryptocurrencies 

aren’t always the biggest. Some of the most popular, like Bitcoin, can make you good money. But they are not always the coins offering the best combination of investment potential and advanced technology. Also consider newer projects like EOS or NEO.

— Don’t store your cryptocurrencies on an exchange. It could leave you vulnerable to possible hacks and possible mishaps. Instead, move your crypto to a wallet that you control with your own personal key.

— Always appoint a designated successor. This is not just for estate planning. If something should happen to you — or you just happen to forget critical info — it’s important for someone you trust to have all your login credentials and keys.”

Finally, Weiss advises that you “give the weakest currencies a wide berth.” That means, whatever you do, don’t load up on them and bet the farm.

Stocks, bonds and cash vehicles may be really boring next to cryptos, but they won’t experience the kind of crazy volatility seen in the digital currency market.

I’m not suggesting that the Weiss Ratings are the final word on telling whether you will make or lose money investing in these cryptocurrencies. Until we know more about how these coins are capitalized and traded, the general rule is to be extremely cautious.”