Silvergate reiterated Buy at BofA on relatively stable digital currency deposits (NYSE:SI)

Bank of The us analyst Brandon Berman on Thursday has reiterated his Buy ranking on crypto lender Silvergate Funds (NYSE:SI), citing prospective customers for “rather secure” electronic currency deposits on a Q/Q foundation.

Shares of SI are rising 1.2% in premarket investing, as bitcoin (BTC-USD) +1.5% drifts up to $20.4K.

Deposit inflows/outflows at Silvergate (SI) typically count on buyer actions from a variety of crypto sector things this kind of as value, volatility and regulation, Berman wrote in a notice to shoppers.

Specially, common electronic forex deposits are 93% correlated to a mixture of “1) QoQ alter in selling price of bitcoin 2) avg. bitcoin cost volatility and 3) QoQ modify in full volume traded,” in accordance to the note.

That relationship indicates ordinary deposit development amongst +10% and -10% in the 2nd quarter, Berman noted.

Getting into account that Silvergate’s earnings are “remarkably sensitive” to improvements in the dimension of its deposit portfolio, Berman is anticipating Q2 EPS of $.82, or 6% down below consensus.

The Quant Score, meanwhile, screens Silvergate (SI) shares as a Promote with the poorest mark in momentum, even though the Normal Wall Road Analyst views the inventory as a Strong Acquire (7 Strong Buy, 3 Acquire, 1 Hold).

See why SA contributor Kolomeets Investments is bullish on Silvergate Money.