What happened

It was a volatile session for Silvergate Capital (SI) on Wednesday. The stock price dropped by some 5.2% in the morning, but bounced back into positive territory late in the day before ending the day down just 0.3%.

That final result was in line with the broader market, which was down across the board. The Dow Jones Industrial Average dropped 0.3%, the S&P 500 fell 0.7%, and the Nasdaq Composite was off by 0.9%.

So what

It appears that the cryptocurrency-focused bank's shares bounced around primarily in response to the release of several notes from analysts that cover it. On one end of the spectrum, Wells Fargo's Jared Shaw lowered his price target from $78 to $50 -- which, from its current price of $54 per share would represent an 8% decline. The stock is down 63% year to date.

On the other hand, Cannacord analyst Joseph Vafi lowered his target from $200 to $150, which would still be a 178% increase from current levels. You can see there is a pretty wide disparity between the bears and bulls about this bank. While Silvergate missed its consensus revenue and earnings estimates in the third quarter, Vafi said the bank beat his estimates.

Also on Wednesday, Craig-Hallum analyst George Sutton dropped his target from $160 to $100 -- 85% above the current price. According to TheFly.com, Sutton's reasons for the price cut include the Q3 earnings miss and the delays in the rollout of its own stablecoin. He also noted that trading volumes on the Silvergate Exchange Network are down, and that there's nothing to indicate when that situation will change for the better. 

A fourth analyst, Wedbush's David Chiaverini, cut his price target on Silvergate stock to $85 from $120 -- 57% above the current price. He cited crypto deposit outflows of $1.4 billion that were much higher than the expected $500 million, the use of brokered deposits to boost funding, and the stablecoin delay as his primary reasons for the target price cut, reported TheFly.com.

Now what

Silvergate Capital goes as the cryptocurrency market goes, for the most part, so as long as this crypto winter persists, don't expect much to be different for it.

But, over the long term -- as most of the analysts imply with their price targets -- the outlook seems promising for Silvergate given its status as the leading (and pioneering) bank and trading platform for the cryptocurrency industry.

Also, rising interest rates will benefit Silvergate Capital because it doesn't pay interest on deposits, but does collect interest when it loans those funds out. However, the sharp drop in deposits due to weaker crypto prices nullified any gains it might have accrued from rising rates.

This issue, too, should resolve, but overall, there is so much uncertainty in the crypto space right now that Silvergate stock should be viewed with caution. Any investment in it should be a relatively small part of a diversified portfolio.