Morgan Stanley analyst Manan Gosalia assumes coverage of Silvergate Capital (NYSE:SI) with an Equalweight rating due to the stock's strong correlation to cryptocurrency prices and volatile markets. Near term, the company stands to benefit from higher interest rates with its growing low-cost deposit base and rising asset yields. "Silvergate (SI) is the most asset-sensitive bank inour coverage, with a 30% benefit to net interest income from the first 100-bp increase in interest rates," Gosalia wrote in a note to clients. Its Silvergate Exchange Network, its proprietary payments platform that facilitates real-time transfer of dollars between digital currency customers, give SI a growing base of non-interest bearing deposits, he said. For the longer term, Silvergate (SI) is seeking to unlock value from a stablecoin offering using its recently acquired Diem platform. Recall that in January, the bank acquired block blockchain payment network assets from Diem Group, the project originally started by
