「Bitcoin Hasn't Outperformed Silver in the Past 8 Years」

As this phrase began to circulate among traders, a reassessment of silver's value had already begun.

On January 27, the price of silver surged 16% intraday, hitting a historic high of $117.73/ounce, with its market value over the past 12 months now double that of Bitcoin's total market cap.

The world's largest silver ETF, iShares Silver Trust (SLV), saw a daily trading volume of $32 billion, 15 times its average daily volume, surpassing the combined volume of the S&P 500 ETF (SPY), NVIDIA (NVDA), and Tesla (TSLA), becoming the world's most traded security.

Silver ETF $SLV's trading volume reached a daily volume of 32B yesterday

Silver, an ancient precious metal that has been dormant at the bottom for nearly a decade, why has it suddenly gained market favor? It seems that the narrative of merely speculative trading in the precious metals sector is somewhat thin.

Indeed, silver's narrative is shifting from "the poor man's gold" to "an essential for industrial growth," undergoing a profound structural reshaping of its fundamentals. Whether from industrial demand, monetary attributes, institutional trends, or ETF inflows, silver appears to be experiencing its "Bitcoin moment."

Industrial Demand Surge

One of the key reasons for silver's rise is an ongoing and irreversible industrial revolution.

The development of new industries such as photovoltaics, new energy vehicles, and AI has made the demand curve for silver steeper than ever before due to technological iteration and market expansion.

Photovoltaics

The inflection point for silver demand in the photovoltaic industry occurred in 2022. Prior to this, the industry commonly used PERC cell technology, leading to a relatively stable silver consumption. However, as the industry transitions to more efficient cell technologies, the demand for silver paste in cells has surged.

Furthermore, conductive silver paste is a core material in photovoltaic cells with no current substitute. By 2024, global silver usage in photovoltaics will reach 6,147 tonnes, accounting for nearly a third of global silver demand, a scale equivalent to the sum of global silver jewelry demand.

Silver Industrial Demand (Dark Blue Represents Solar Demand, Light Blue Represents Other Industrial Demand) | Source: Silver Institute Survey

According to data from the China Photovoltaic Industry Association (CPIA), the cost of silver paste has accounted for 53% of the non-silicon cost of solar cells, shifting from its previous "ancillary material" status to an equally important "main material" alongside silicon.

Facing the skyrocketing price of silver from $25 to $115, solar companies are not insensitive. Leading companies like Longi Green Energy have clearly stated in their financial reports that the rising cost of silver paste has severely squeezed profits. However, the reality is that without a mature alternative solution (such as copper plating) being widely commercialized, they can only passively accept it.

New Energy Vehicles

Electric vehicles are another "battery powerhouse," and after 2020, the global penetration rate of new energy vehicles has also crossed a tipping point, soaring from 3% in 2019 to 21% in 2024.

Moreover, the amount of silver in each pure electric vehicle is 2 to 3 times that of a traditional internal combustion engine vehicle. Taking BYD as an example, analysis shows that a typical EV battery pack (100 kWh capacity, about 200 cells) requires about 1 kilogram of silver per vehicle.

If we calculate based on BYD's projected sales volume of 4.3 million vehicles in 2025, the silver demand from this single company alone could reach 4,300 tons. In addition, BYD's advancement in silver-based solid-state battery technology may further increase silver consumption in the future.

AI Data Centers

The explosive growth of AI data centers has also added new dimensions to silver demand. According to data from the Silver Institute, silver demand related to AI is projected to surge by 30% in 2025, with annual usage exceeding 1,000 tons.

Although accounting for only 3%-6% of global silver demand, AI servers have become the fastest-growing segment in silver demand, with an annual growth rate exceeding 50%. An NVIDIA H100 server contains 1.2 kilograms of silver, far surpassing the usage of around 0.5 kilograms in traditional servers.

Supply Rigidity

Furthermore, the current supply of silver is struggling to keep pace with demand. Around 70% of the world's silver is a byproduct of mining other metals like copper, lead, and zinc, meaning that silver's supply is "rigid" and cannot be rapidly increased in response to price.

Data shows that the global silver market has experienced a structural shortage for five consecutive years since 2021, and the gap is still widening. When unstoppable demand meets a lack of elastic supply, a sharp price increase is only a matter of time.

Awakening of Monetary Properties

Gold-Silver Ratio

In addition to industrial demand, the long-suppressed monetary properties of silver are also being reawakened in the market. To understand this, the key lies in the gold-silver ratio, which is the amount of silver ounces needed to purchase one ounce of gold.

The value of gold is almost entirely supported by its monetary properties, while silver has dual attributes of industrial and monetary value. In a traditional economic cycle, during an economic recession, a contraction in industrial demand weighs on the price of silver, while safe-haven demand boosts the price of gold, causing the gold-silver ratio to rise.

For example, after the 2008 financial crisis, global industrial production stagnated, leading to a sharp decline in silver demand from industries such as automotive and electronics, while investors flocked to gold for safety, causing the gold-silver ratio to temporarily exceed 80. Conversely, during economic recovery, a rebound in industrial demand drives up the price of silver, bringing down the gold-silver ratio. After the global manufacturing revival following the 2020 pandemic, the gold-silver ratio dropped from its historical high of 123 to 65.

However, this pricing logic is undergoing a profound shift. Against the backdrop of a globally dollar-dominated fiat currency credit system under strain, the "currency" properties of precious metals are being reactivated.

Gold-Silver Ratio Trend

The current gold-silver ratio has fallen below 50, more than halving from last year's 103, hitting a new low in nearly 14 years. Historically, the long-term average of the gold-silver ratio is between 60-70, and dropping below 50 is a clear signal of silver value reassessment

Investors buying gold and silver are no longer just for traditional hedging or industrial applications but also to hedge against fiat currency depreciation risk. The monetary properties of silver are being activated in sync with its industrial attributes, making it, along with gold, a medium of value storage.

Precious Metals' "Second Dragon"

In addition to the fundamental demand for silver itself, the substantial drop in the gold-silver ratio is also being driven by capital rotation effects.

Within the precious metals sector, gold is undoubtedly the "first dragon," while silver is the more elastic "second dragon." When monetary properties become the main theme of market pricing, silver, with a lower price and historically higher volatility, naturally attracts funds seeking higher returns.

According to nearly 50 years of data from the Chicago Mercantile Exchange (CME Group), the gold-silver ratio has undergone six significant corrections, with five occurring during gold's major bull markets.

Once a gold bull market is established, funds tend to rotate into more volatile silver to pursue excess returns. The performance throughout 2025 perfectly confirms this: gold rose by 67.5%, while silver surged by 175%, a 2.6x increase over the former.

The significant drop in the gold-silver ratio reflects market capital rotation from gold to silver. Investors are not only buying precious metals to hedge risk but also chasing higher potential returns from silver relative to gold.

Biggest Bull: JPMorgan Chase

A particularly intriguing signal in the market comes from JPMorgan Chase. It was fined a staggering $920 million in 2020 by the U.S. Department of Justice and the Commodity Futures Trading Commission (CFTC) for long-standing manipulation and suppression of the silver price.

Their primary manipulation tactic involved placing large amounts of spoof orders to create a false impression of demand or supply in the market, influencing prices before swiftly canceling orders and engaging in profitable trades in the opposite direction.

However, following the fine, JPMorgan Chase shifted from a long-term paper short position to aggressively accumulating physical silver. According to multiple sources, JPMorgan Chase now holds over 750 million troy ounces of physical silver, making it the world's largest holder, surpassing even the holdings of the world's largest silver ETF (SLV).

In 2025, JPMorgan Chase closed approximately 200 million ounces of paper short positions from June to October and subsequently acquired 21 million troy ounces of physical silver within just six weeks from November to December.

After opening a new vault in November 2021, JPMorgan Chase gradually took over all of SLV's silver holdings

CFTC data also confirms this shift. In January 2026, non-commercial net long positions in silver hit a new high, with JPMorgan Chase's net long position being significant.

Regarding JPMorgan Chase's shift, analysis from Bloomberg and Reuters commonly cites that part of the reason was its advance knowledge through client trades of significant and rigid demand for silver from Chinese photovoltaic and new energy companies.

By the end of 2025, JPMorgan Chase will relocate its core precious metals trading team to Singapore and build a large-scale vault locally.

This series of operations was interpreted by the market as the smartest money on Wall Street having already bet on a legendary silver rally. When the former price suppressors become the biggest holders, silver promptly embarks on a raging bull market.

Returning from "Digital Assets" to "Physical Assets"?

While silver fundamentals are exceptionally strong, the former "digital gold" Bitcoin seems to be facing a moment of trust crisis. By comparison, a "rotation" from digital assets back to physical assets is taking place.

The ETF fund flow data in January 2026 most vividly illustrates this rotation. On one side, Bitcoin spot ETFs saw outflows of up to $1.7 billion in 11 trading days; on the other side, funds are pouring into silver on an unprecedented scale.

On January 27, the world's largest silver ETF, iShares Silver Trust (SLV), saw its daily trading volume soar to $32 billion, topping the daily global ETF trading volume list.

The market frenzy does not stop there. In the top ten list by volume, ProShares Ultra Silver (AGQ), a leveraged ETF that doubles down on silver, also prominently appears, ranking fifth.

This indicates that the inflow into silver comes not only from funds seeking stable allocation but also from a significant speculative force seeking high multiple returns.

January 27 ETF Trading Volume Ranking

Retail investors' enthusiasm has been high before this. According to VandaTrack statistics, in the 30 days leading up to January 15, retail traders poured over $920 million into silver-related ETFs, marking the largest monthly inflow on record.

Funds are moving out of Bitcoin ETFs and flowing into precious metal ETFs represented by gold and silver. Behind this is investors' reassessment of the risk-return ratio of the two assets.

There is a rumor that can explain this flow of funds in and out because the U.S. government cracked the Bitcoin wallet by bumping. The Crown Prince Group transferred 127,000 Bitcoins directly into the U.S. government's wallet, worth about $15 billion.

Simply put, this pool of funds considers Bitcoin to be insecure. Coupled with news such as the potential for quantum computing to break Bitcoin's algorithm, this has driven the funds to quickly pivot to choosing gold and silver.

From a price perspective, Bitcoin experiences diminishing marginal returns every four years, while silver has just emerged from a decade-long consolidation phase. In 2025, against a backdrop of a 175% increase in the price of silver, the price of Bitcoin has retraced over 30% from its highs. As we enter 2026, the divergence in the price trends of the two assets becomes more pronounced.

As Bitcoin's narrative begins to falter and funds start seeking new directions, silver, due to a shift in its fundamentals, is becoming the darling of this era.

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