One of the oldest stock brokerages in the US, EF Hutton, starts its coverage on cryptocurrencies. Its coverage on cryptocurrencies is boosting confidence among the investors to venture into this market. EF Hutton is covering on seven different cryptocurrencies, which include Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Eos (EOS), Litecoin (LTC), Ripple (XRP) and Cardano (ADA).
Apart from providing the crypto coverage, it also provides equity research coverage of companies involved in cryptocurrencies and other digital assets. Hutton is employing a rating scale in order to rank each of the seven cryptocurrencies. Topping the ranking charts is Bitcoin Cash which was awarded a rating of five stars.
According to Christopher Daniels, CEO of EF Hutton,
“Our rating on BCH is five stars. In our rating scale – 5-stars is the highest and best rating that can be assigned to an instrument. It means that we foresee significant appreciation within the next 12 months.”
He further went on to say that the rating coverage will also be provided to companies that deal with cryptocurrencies and other digital assets. Hut 8 Mining and Hive Blockchain Technologies will be the first under this project.
The Methodology behind Crypto Analysis
Daniels explained the methodology used in the analysis by saying “EF Hutton evaluates each instrument separately and also in relation to its position vis-a-vis other cryptocurrencies.” also adding the following statement:
“We consider short, medium and long-term factors that will impact the price of the instrument, however our rating is based on our view of the instrument in the next 12-months.”
The very first factor that the firm is considering is “the purpose for which the instrument was originated. We look for intrinsic purpose driven of demand”, as per the CEO. It will further “look at how the instrument is positioned versus other instruments that may overlap with its originated purpose.” Also adding, “For example, technology and other factors that may give one instrument an advantage over another instrument.” Clarifying his statement, Daniels had this to say “A good example of this is BCH’s design to address some of BTC issues.”
He further described the ranking criteria by saying:
“After we complete our instrument specific analysis we look to other issues that can impact the supply and demand equation. For example, liquidity. We consider the extent to which peculators attracted to the instrument and thereby add to the liquidity of the instrument.”
EF Hutton was established in 1904, since then it is providing digital financial services along with online investment services. Hutton is a subsidiary of Hutn Group Inc., which also owns Vibrant Mobility Inc, a mobile communication services provider and also Megga Inc, a social networks and online services provider.