Silvergate Capital added to Wedbush Best Ideas List, but stock drops with crypto

Wedbush Securities adds Silvergate Capital (SI) to its Best Ideas List after getting a better understanding about the bank's Diem partnership from Silvergate's management.Under the agreement, Silvergate, as the exclusive issuer of Diem stablecoins, will retain the interest income generated from investing reserve balances in Treasury securities; previously Wedbush analysts assumed SI would receive only a small management fee and the Diem Association would get the bulk of the interest income.That could lead to revenue in the "hundreds of millions" in a higher rate environment, Wedbush says.Sees the upside potential to SI's earnings as significant; as a result, Wedbush sees the stock as underpriced.The addition to the ideas list isn't helping the stock in premarket trading. Silvergate shares drop 10% as sentiment turns against cryptocurrencies.Bitcoin tumbles 24% to ~$33.4K and ether sinks 36% to $2,167.Silvergate's SEN Leverage program allows investors to access capital through U.S. dollar loans collateralized by bitcoin.