Silvergate Capital is poised to be a long-term winner in the crypto industry even as the eventual case for digital technology remains uncertain, according to Wells Fargo. Analyst Jared Shaw began covering the stock with an overrated rating, saying that Silvergate is “forging a niche role” as a key bank in the crypto ecosystem. “While the role of cryptocurrencies in the financial ecosystem is still being debated, what cannot be ignored is the continued adoption of cryptocurrencies and supporting products by some of the largest global institutions. blockchain support… Customer growth is the biggest driver of deposits at SI, which will drive most of the bank’s short-term profits, as 77% of assets are securities (55% floating) and the loan book also has a floating rate,” wrote Shaw. Cryptocurrencies have been hit hard in recent months as the prices of major digital currencies have fallen 60% or more from their highs in end of 2021. Silvergate shares are down 50% this year, however, Shaw said in the note that “the majority of the case bears are priced at current levels” and set a $120 price target for per share, 62% above Friday’s closing stock price. To be sure, bitcoin fell below $24,000 on Monday morning after trading above $30,000 on Friday. That m was so strong that Wells Fargo’s downward outlook for Silvergate played out. “With equities still trading highly correlated with BTC, we would see BTC price continue to fall leading to a drop from current levels. If BTC drops to $20k, we estimate EPS will be ~20-35% down in ’22-23 from our base case, and SI will trade better with mid-cap banks at ~12x ’23E, or ~$ 60,” Shaw wrote. – Michael Bloom of CNBC contributed to this report.