While it’s still early days in terms of broader digital asset adoption, the growth outlook for Silvergate Capital (SI) as a “pure-play crypto banking solution” is very limited in the current crypto winter environment, Wells Fargo said in a research report Thursday.
Wells Fargo downgraded its rating on the stock from overweight to underweight and cut its price target to $70 from $115, sending the shares down 5% to $74.95 early Thursday.
Silvergate is one of the most asset-sensitive banks, but deposit outflows due to weaker crypto prices more than offset the benefits from higher interest rates, a Wells Fargo team of analysts led by Jared Shaw wrote.
The crypto bank's growth plans rely on a recovery in cryptocurrency markets or rapid stablecoin adoption, the note said, and its two main initiatives are the launch of stablecoin- and bitcoin-backed lending via its SEN Leverage platform.
The analysts said, however, that with stablecoin regulation taking longer than expected and little news...
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INN caught up with cryptocurrency investment expert Dan Hoover to review the current landscape and where the market may be heading. The cryptocurrency investment marketplace has gone through severa...