According to Wells Fargo, even though the ultimate case of digital technology remains unclear, Silvergate Capital is poised to become a long-term winner in the crypto industry. Analyst Jared Shaw began his coverage of the overweight stock, saying that Silvergate is “playing a distinctive role” as an important bank in the crypto ecosystem. “While the role of crypto in the financial ecosystem is still up for debate, the continued adoption of crypto and blockchain-enabled products by some of the largest global institutions cannot be ignored. … The big driver is Shaw wrote, which should drive much of the bank’s near-term profitability, as 77% of assets are securities (55% floating) and the loan book is also heavily floating-rate. It has been hit hard as prices of major digital currencies have fallen 60% or more from highs in late 2021. Silvergate stock is down 50% this year. However, Shaw noted in the note that “most bears -case price at current levels” and set a price target of $120 per share, which is 62% higher than where the stock closed on Friday. To be sure, trade above $30,000 on Friday. The following Monday morning, bitcoin fell below $24,000. The drop was so sharp that it sent Wells Fargo to Silvergate. brought into play the negative scenario of “Shares are still trading with a high correlation with BTC, we will see further downside in BTC price to a downside break from current levels. If BTC drops to $20k, we estimate EPS Will fall ~20-30% in ’22-’23. Versus our base case and SI will trade higher with mid-cap bank counterparts at ~12x ’23E EPS, or ~$60,” Shaw wrote. — CNBC’s Michael Bloom contributed to this report.