What happened

Due to a mild inflation report, the stock market had a bullish morning on Tuesday, but Silvergate Capital (SI) stock missed the upswing. Instead, the regional bank with close ties to the cryptocurrency industry saw share prices fall as much as 15.2% at 11:10 a.m. EST. A team of JPMorgan analysts downgraded stocks and cut price targets across a long list of regional banks. Silvergate turned up on that list, amplifying the bearish draft from the ongoing collapse of the FTX crypto exchange.

So what

JPMorgan maintained its "overweight" rating on Silvergate's stock, which means that the stock should outperform the market in the near future and investors should consider buying it. However, the firm's one-year price target on Silvergate was lowered from $50 to $30 per share. That's still a large jump from Monday evening's closing price of $21.26 per share, but JPMorgan definitely reduced the volume on its bullish bullhorn.

Elsewhere, many cryptocurrencies saw positive returns on Tuesday. For example, Bitcoin (BTC -3.37%) was up by 4% just before Wall Street's closing bell, and Ethereum (ETH -4.19%) had gained 4.9% at the same moment. Silvergate's investors shrugged off these pleasant signs to focus on the continued crumbling of the FTX empire instead. Former FTX CEO Sam Bankman-Fried was arrested with fraud charges on Tuesday morning. The exchange wasn't Silvergate's largest customer by any means, but the cryptophilic bank was too close for comfort to the crypto exchange's allegedly loose money management practices.

Now what

Silvergate closed Tuesday's trading at an 11.9% downtick, reaching a new two-year low. The bank now trades at just 5.5 times trailing earnings and 3.2 times free cash flows -- ratios normally reserved for companies on the brink of bankruptcy.

But the financial analysis wizards of JPMorgan's banking sector still recommend the stock with a price target 60% above today's closing level. Furthermore, Silvergate has passed its mandated financial stress tests with flying colors. And the crypto sector sorely needs Silvergate's support for trading services across the borderline between cryptocurrencies and old-school dollars. I would be shocked if Silvergate suffers crippling damage from the FTX meltdown. So this stock looks like a solid buy at these bargain-bin prices thanks to the company's robust financial safety net and JPMorgan's continued support.