Last Friday, I explained — for the second time — why I don’t own BTC, the world’s leading digital currency.
It comes down to two main reasons…
First… BTC is too easy to lose.
And second… BTC is not the safe haven asset that many have proclaimed it is.
After all, it’s still down over 30% from its all-time highs despite geopolitical strife and soaring inflation.
But that doesn’t mean I’m totally against the digital asset space.
In fact, I think one I’ve found a stock that could be about to take off regardless of what happens with the price of individual digital currencies.
And I think it could make a big move soon.
The Bank of the Future
The stock is Silvergate Capital Corporation (SI). It is the leading bank to the digital currency universe.
So, yes, the stock is somewhat correlated to BTC and other digital currencies. But its risk profile is totally different.
It’s not easy to lose like BTC, and while the stock is not a safe-haven asset, at least it doesn’t claim to be.
The company is familiar with the current regulatory environment, and it has relationships with the big banking industry regulators.
The stock has a $4.6 billion market capitalization but should be worth billions in future potential revenue.
Earnings growth is massive. And it’s going to continue to be massive for some time, as it’s providing banking services to most of the leading digital currency exchanges in the United States.
The Technical Setup
From a technical perspective, the chart is potentially setting up for a massive move higher.
Take a look at the daily chart below…
As you can see, the stock just reclaimed its 50-day (red line) and 200-day (white line) moving averages a few weeks ago in mid-March.
Since clearing the 200-day, it jumped as much as 24% before cooling off over the past few days.
The dotted horizontal line shows a likely resistance level near $165.
If SI breaks above that resistance level on high volume, the odds are good that it will retest its highs near $239.
A Picks-and-Shovels Play
As noted, the company is strong from a fundamental perspective as well.
Earnings are up eight-fold since 2016 and continue to grow, and major investment funds continue to add the stock to their portfolios.
I like Silvergate because it is sort of a “picks-and-shovels” play on the digital asset space.
That’s a reference to Levi Strauss, who made a fortune selling picks, shovels and denim to hopeful miners in the gold rush of the 1800s.
Selling picks and shovels was his way to profit without ever making a bet on whether or not he would find gold.
And the same thing goes for a company like Silvergate…
If buying BTC is like a bet on finding gold, then buying SI stock is like a bet that gold miners are going to need picks and shovels.
Regardless of which digital currency comes out ahead, Silvergate will profit from the overall trend.
Want More Stealth Trades?
Silvergate Capital is what I consider to be a “stealth trade.”
While everyone is focused on BTC and individual digital assets, Silvergate is flying under the radar of most investors.
As noted, some major investment funds are adding the stock to their portfolios, but it’s really not getting the attention it deserves by Wall Street.
That means this is a great opportunity to buy just before others are catching on to this stock…
And I have plenty more trades like this inside my premium Stealth Trades research service.
Embrace the surge,
Editor, Stock Surge Daily