Learning from the 2008 global economic crisis with unbiased crypto ratings
The Oscar-winning Hollywood Movie ‘The Big Short’ brought to life the flaws in the US mortgage market and the role financial rating agencies played in prompting the 2008 global economic crisis. Despite their near-total failure in 2008, Moody’s Investor Services, Standard and Poor’s (S&P), and Fitch Group are still well-established companies claiming to help institutions and retail investors understand investment risk. Typically, the ratings provided by these big institutions are graded from A to D and inform investors’ hold, buy, and sell decisions.
Yet, none of these “Big 3” traditional firms have ventured into the world’s fastest-growing market of crypto assets.
Weiss Ratings Offers Weiss Ratings for Cryptocurrency
Established in 1971, Weiss Ratings is a US-based company that started offering crypto ratings in 2017. Today, Weiss Ratings Cryptocurrency rates over 500 cryptocurrencies including Bitcoin, Ethereum, and Ripple.
While there is a limited amount of information on how Weiss rates crypto assets, their rating assessment of cryptos is reportedly built on advanced computer modeling. This modeling takes into account several factors including blockchain technology, level of adoption, trading patterns, security, and risk-to-reward potential. Weiss Crypto Ratings also offers Weiss Crypto. Weiss Crypto publishes daily articles as part of the product offering to Weiss crypto investors.
A Shared Commitment to Unbiased Crypto Ratings
Building off of Weiss Rating’s commitment to unbiased crypto ratings, innovative firms like Evai and Tokenmetrics have introduced Artificial Intelligence into their crypto ratings. Only Evai utilises both artificial intelligence and machine learning to provide crypto ratings that are free from human bias. The result is that Evai Crypto Ratings give investors the best opportunity to see and invest clearly amongst market and media hype.
Why is Artificial Intelligence Needed in Crypto Ratings?
In 2008, the global financial crisis, known as the Global Economic Crisis, created a call for changes to how asset risks are evaluated by supposedly independent rating agencies. One of the major reasons for the 2008 crash was the misallocation of financial ratings. This centralised system was heavily influenced by human bias. Arguably, the central catalyst for the crisis arose within rating agencies that dressed up risky assets, such as debt obligations (CDOs) as AAA-rated securities without looking at the constituent assets. ‘The Big Short’ cataloged the events of the 2008 subprime mortgage crisis. In the movie, the rating model is described as “ripe for exploitation.”
The lack of investor knowledge at the time, coupled with blind faith in an inaccurate and biased rating system brought the financial system to its knees. In doing so, it depleted the life savings of individuals and small businesses. Research indicates that the crisis could have been mitigated if an accurate, trustworthy rating system had been in place.
Crypto AI and a Better Way Forward
In October 2008 — one month after the failure of Lehman Brothers’ bank sparked the systemic collapse leading to the great recession — Satoshi Nakamoto published the Bitcoin whitepaper.
It told of a decentralised, peer-to-peer electronic cash system, devoid of intermediaries and governmental interference. This was the birth of Bitcoin and all the other crypto assets that were to follow.
Evai Crypto Ratings: Learning From the Past to Inform the Future
In 2019, Professor Andros Gregoriou and Evai Founder Matt Dixon, were looking to learn from the past mistakes of the traditional financial system and create accountability for financial ratings. They set out on their journey to create a decentralised and unbiased rating model for crypto assets.
The emerging asset class of cryptocurrencies was identified as the ideal proving ground for a new era of ratings built on the foundations of peer-reviewed academic research and Nobel Prize-winning theory. Pioneering a decentralised approach to financial ratings, the Evai Research and Development teams designed a crypto ratings platform that combines a multi-factor model with the latest Artificial Intelligence and Machine Learning technology. This ensures that all crypto ratings provided to crypto investors are free from the human bias that caused the 2008 global economic crisis.
This ensures that all of the crypto ratings provided to crypto investors are free from the human bias that caused the 2008 global economic crisis.
The Evai platform has been developed to offer investors a step-by-step guide to the fast-growing market. The resulting Evai Crypto Ratings give investors the opportunity to assess the underlying value of leading crypto assets along with undiscovered cryptos with high-profit potential. To see how live crypto ratings can help you make smart and timely investments, head over to the Evai Crypto Ratings Dashboard.
