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After Microstrategy downgrade, analysts recommend smallcap crypto-centric bank

After Microstrategy downgrade, analysts recommend smallcap crypto-centric bank


Following a Citi report downgrading business intelligence firm Microstrategy’s stock to a “sell” rating, analysts for popular trading website the Motley Fool have recommended a lesser-known bank stock that also has an emphasis on cryptocurrencies. 

Last Tuesday, Citi analyst Tyler Radke downgraded Microstrategy (NASDAQ:MSTR) shortly after the firm announced a debt purchase that would bring its Bitcoin holdings up to a nearly $1 billion mark.

The report chided the company, which at points has seen share prices more than triple from $92 yearly lows, for its “disproportionate” focus on bolstering its BTC holdings, and said that the current run is “overextended.”

However, in a recap article today analysts for the Motley Fool suggested the little-known, crypto-focused smallcap Silvergate Capital (NYSE: SI) might be worth a look for traders aiming to capitalize on the next crypto play.

Silvergate — the La Jolla, California-based bank with over $2 billion in assets under management — boasts an impressive list of cryptocurrency firms as clients, including Coinbase, Paxos, Circle, Gemini, and Polychain Capital.

Motley Fool contributors Matt Frankel and Justin Moser noted the banks 21-year streak of profitability, $50 million in BTC on the books, and a lending book featuring primarily commercial mortgages. Both analysts also recommended the bank as a superior investment to spot BTC.

A previous Motley Fool article earlier in the week also called attention to the crypto exchange infrastructure Silvergate has built for its clients, the Silvergate Exchange Network (SEN). SEN operates as a 24-hour intermediary between exchanges and their institutional clients buying and selling cryptocurrencies, as opposed to normal banks which would be limited by normal working hours. SEN has reportedly cleared over $100 billion in volume since inception.

SI currently sits at a 36.69 price-to-earnings ratio, offers a 10.36% dividend, and is up nearly 100% on the year.

Silvergate and Microstrategy aren’t the only publicly-traded blockchain stocks enjoying a surge in investor interest. Mining giant Riot Blockchain is also on a tear after appointing new members to its board.



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CryptoCurrencyUSDChange 1hChange 24hChange 7d
Bitcoin36,578 0.43 % 5.64 % 10.38 %
Ethereum1,177.0 0.02 % 3.72 % 3.82 %
Tether0.9984 0.13 % 0.12 % 0.07 %
Polkadot14.45 0.85 % 4.52 % 55.14 %
XRP0.2805 0.23 % 5.25 % 12.77 %
Cardano0.3071 0.30 % 3.48 % 0.29 %
Litecoin143.50 0.64 % 4.84 % 17.12 %
Bitcoin Cash484.50 0.47 % 5.39 % 10.60 %
Chainlink22.23 4.01 % 23.35 % 45.37 %
Stellar0.2841 0.24 % 5.51 % 6.27 %