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After a Citibank report adjusted the stock rating of business intelligence company Microstrategy to “sell”, analysts at the popular trading website Motley Fool recommended a lesser-known bank stock, which also Focus on cryptocurrency.
Last Tuesday, Citibank analyst Tyler Radke downgraded the rating of Microstrategy (NASDAQ: MSTR) after the company announced that it would purchase debt, bringing its Bitcoin holdings to nearly $1 billion.
The report accused Microstrategy of “too much” focusing on increasing its holdings of Bitcoin, calling the current gains “excessive”. The company’s share price has more than tripled from its annual low of $92.
However, in a recap today, Motley Fool analysts suggested that for traders who plan to take advantage of the next crypto boom, the little-known cryptocurrency-focused small-cap Silvergate Capital (NYSE :SI) may be worth a look.
Silvergate, a bank in La Jolla, California, manages more than $2 billion in assets and has many cryptocurrency companies as clients, including Coinbase, Paxos, Circle, Gemini and Polychain Capital.
Motley Fool analysts Matt Frankel and Justin Moser pointed out that Silvergate has been profitable for 21 consecutive years, with $50 million in Bitcoin on its books, and it also has a lending book that is mainly commercial mortgage loans. The two analysts also recommended the bank as the best investment bank for spot bitcoins.
Earlier this week, an article on the Motley Fool also mentioned the cryptocurrency trading infrastructure that Silvergate has built for its clients, the Silvergate Trading Network (SEN). As a 24-hour intermediary between exchanges and institutional clients buying and selling cryptocurrencies, SEN is not restricted by normal working hours like ordinary banks. According to reports, since its establishment, SEN has liquidated more than $100 billion in trading volume.
Silvergate’s current price-to-earnings ratio is 36.69 times and its dividend is 10.36%, which has risen by nearly 100% this year.
Silvergate and Microstrategy are not the only publicly traded blockchain stocks that have surged investor interest. Mining giant Riot Blockchain has also become hot after appointing new members to the board of directors.
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