The Silvergate Capital (SI) stock is a buy, Wells Fargo said in a note on Monday.
According to the Wall Street analyst, Silvergate has potential for further growth and adoption in the crypto space, a scenario likely to see its price trajectory pick up.
Wells Fargo (WFC) has thus initiated coverage for the stock, allocating an overweight rating and setting a price target of $120. Per the firm, the stock’s current bear outlook is already priced in, giving investors seeking an opportunity in the crypto bank’s market potential a great entry point.
Adoption in crypto
Wells Fargo notes in its report that crypto is at an adoption stage where the entry of global institutions is giving the sector a lot of room for upside growth. Already, Silvergate is seeing huge expansion of its digital banking offering, with more customers buoyed by the entry of names such as Fidelity Investments, JPMorgan, PayPal and Tesla.
Silvergate’s provision of FDIC-insured services is key to its growth profile, with a 35%-40% annual increase in customer numbers since 2019.
SI stock price was at $61.86 in morning deals on Monday, down nearly 17% as the broader markets bled amid fresh selling. The NYSE listed stock is over 58% down year-to-date, an outlook that mirrors price weakness in Bitcoin (BTC) as well as the overall stock market.
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