Silver in the Eyes of Traders: The Next Bitcoin

"Bitcoin Has Underperformed Silver Over the Past 8 Years"

As this statement began circulating among traders, a revaluation of silver's worth was already underway.

On January 27, the price of silver surged by up to 16% intraday, hitting a historic high of $117.73 per ounce. Its market capitalization increase over the past 12 months is now double the total market cap of Bitcoin.

On that day, the world's largest silver ETF, iShares Silver Trust (SLV), recorded a staggering trading volume of $32 billion—15 times its average daily volume. This figure even surpassed the combined volume of the S&P 500 ETF (SPY), NVIDIA (NVDA), and Tesla (TSLA), making it the most traded security globally for the day.

Trading volume for the Silver ETF $SLV reached $32B in a single day yesterday.

Silver, an ancient precious metal, has languished near its lows for nearly a decade. Why is it suddenly being fervently pursued by the market? Mere speculative sentiment within the precious metals sector seems insufficient to explain this.

In reality, 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 viewed from industrial demand, monetary attributes, institutional movements, or ETF inflows, silver appears to be having its "Bitcoin moment."

The Explosion of Industrial Demand

One of the key drivers behind silver's rise is an ongoing, irreversible industrial revolution.

Due to technological iteration and market expansion, the demand curve for silver from the development of new industries like photovoltaics (PV), new energy vehicles (NEVs), and AI has become unprecedentedly steep.

Photovoltaics (PV)

The tipping point for PV industry demand for silver occurred in 2022. Prior to this, the industry predominantly used PERC cell technology, with relatively stable silver consumption. However, as the industry transitioned to higher-efficiency cell technologies, the demand for silver paste in cells surged.

Moreover, conductive silver paste is a core material for PV cells, with no viable alternative currently available. In 2024, global PV silver consumption reached 6,147 tons, accounting for nearly 30% of total global silver demand—a scale comparable to the total global demand for silver jewelry.

Industrial demand for silver (dark blue represents PV demand, light blue represents other industrial demand) | Source: World Silver Survey

According to data from the China Photovoltaic Industry Association (CPIA), silver paste costs now account for 53% of the non-silicon costs of PV cells, transforming it from a past "auxiliary material" into a "primary material" as crucial as silicon.

PV companies are not insensitive to the silver price surge from $25 to $115. Leading firms like LONGi Green Energy have explicitly stated in their financial reports that rising silver paste costs are severely squeezing profits. However, the reality is that without the large-scale commercialization of mature alternatives (like copper plating), they can only passively accept the situation.

New Energy Vehicles

Electric vehicles are another major "battery consumer." After 2020, the global penetration rate of new energy vehicles also crossed a critical threshold, jumping from 3% in 2019 to 21% in 2024.

Each pure electric vehicle uses 2 to 3 times more silver than a traditional internal combustion engine vehicle. Taking BYD as an example, analysis suggests a typical EV battery pack (100 kWh capacity, approximately 200 cells) requires about 1 kilogram of silver per vehicle.

Based on BYD's projected sales of 4.3 million vehicles in 2025, silver demand from this single company alone could reach 4,300 tons. Furthermore, BYD's ongoing development of silver-based solid-state battery technology may further increase silver usage in the future.

AI Data Centers

The explosive growth of AI data centers has added a new dimension to silver demand. According to the World Silver Institute, AI-related silver demand surged by 30% in 2025, with annual consumption exceeding 1,000 tons.

Although this represents only 3%-6% of total global silver demand, AI servers have become the fastest-growing segment for silver demand, with an annual growth rate exceeding 50%. A single NVIDIA H100 server contains 1.2 kilograms of silver, far surpassing the approximately 0.5 kilograms used in traditional servers.

Supply Rigidity

Additionally, the current supply side is struggling to keep pace with demand. Approximately 70% of global silver is a byproduct of mining other metals like copper, lead, and zinc. This means silver supply is "rigid" and cannot be rapidly increased in response to price signals.

Data shows the global silver market has experienced a structural deficit for five consecutive years since 2021, and the gap continues to widen. When insatiable demand meets inelastic supply, a sharp price increase is only a matter of time.

The Awakening of Monetary Attributes

Gold-to-Silver Ratio

Beyond industrial demand, silver's long-suppressed monetary attributes are being reawakened by the market. The key to understanding this lies in the gold-to-silver ratio—the number of ounces of silver required to purchase one ounce of gold.

Gold's value is almost entirely supported by its monetary attributes, while silver possesses both industrial and monetary properties. In traditional economic cycles, during recessions, shrinking industrial demand drags down silver prices, while safe-haven demand pushes up gold prices, causing the gold-to-silver ratio to rise.

For instance, after the 2008 financial crisis, global industrial production stalled, and demand for silver from industries like automotive and electronics plummeted, while investors flocked to gold as a safe haven, pushing the gold-to-silver ratio above 80 at one point. Conversely, during economic recoveries, rebounding industrial demand drives silver prices higher, and the ratio falls. After the 2020 pandemic, the global manufacturing recovery saw the ratio drop from a historical high of 123 to 65.

However, this pricing logic is undergoing a profound shift. Against the backdrop of a wavering fiat currency credit system dominated by the US dollar, the "currency" attribute of precious metals is being reactivated.

Gold-to-Silver Ratio Trend

The current gold-to-silver ratio has fallen below 50, more than halving from last year's 103 to hit a nearly 14-year low. Historically, the long-term average for the ratio has been between 60-70. Falling below 50 is a clear signal for a revaluation of silver.

Investors are buying gold and silver not merely for traditional safe-haven purposes or industrial applications, but also to hedge against the devaluation risk of fiat currencies. Silver's monetary attributes are being activated in tandem with its industrial properties, positioning it alongside gold as a medium for value storage.

The "Runner-Up" in Precious Metals

The significant drop in the gold-to-silver ratio is driven not only by silver's own fundamental demand but also by a capital rotation effect.

Within the precious metals sector, gold is the undisputed "leader," while silver is the "runner-up" with greater volatility. When monetary attributes become the main pricing theme for the market, silver—with its lower price and historically higher volatility—naturally attracts capital seeking higher returns.

According to nearly 50 years of data from the CME Group, five out of the six major corrections in the gold-to-silver ratio occurred during gold bull markets.

Once a gold bull market is established, capital tends to rotate into the more volatile silver to pursue alpha. The performance throughout 2025 perfectly illustrates this: gold rose 67.5%, while silver surged 175%—2.6 times the gain of gold.

The sharp decline in the gold-to-silver ratio precisely reflects this market rotation of capital from gold to silver. Investors are not only buying precious metals to hedge risks but are also chasing the higher potential returns of silver relative to gold.

The Biggest Bull: JPMorgan Chase

The most intriguing signal in the market comes from JPMorgan Chase. The bank was fined a record $920 million in 2020 by the US Department of Justice and the Commodity Futures Trading Commission (CFTC) for long-term manipulation and suppression of silver prices.

Its primary manipulation tactic involved placing a large number of fake buy and sell orders to create false impressions of demand or supply in the market, influencing prices before quickly canceling the orders and profiting from reverse trades.

However, after being fined, JPMorgan shifted from being a long-term paper short seller to aggressively accumulating physical silver. According to multiple sources, JPMorgan currently holds over 750 million ounces of physical silver inventory, making it the world's largest holder—even exceeding the holdings of the world's largest silver ETF (SLV).

JPMorgan closed approximately 200 million ounces of paper short positions between June and October 2025. Subsequently, in just six weeks from November to December 2025, it added 21 million ounces of physical silver.

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

CFTC data confirms this shift. In January 2026, non-commercial net long positions in silver hit a record high, with JPMorgan's net long position accounting for a significant portion.

Regarding the reasons for JPMorgan's pivot, analyses from Bloomberg and Reuters generally agree that part of the reason lies in its early awareness—through client transactions—of the massive and rigid demand for silver from Chinese PV and new energy companies.

At the end of 2025, JPMorgan relocated its core precious metals trading team to Singapore and began constructing large-scale silver vaults there.

This series of moves is interpreted by the market as a bet by Wall Street's top "smart money" on an epic silver rally. When the former price suppressor becomes the largest holder, a ferocious silver bull market ensues.

From "Digital Assets" Back to "Physical Assets"?

While silver's fundamentals are unprecedentedly strong, the former "digital gold," Bitcoin, seems to be facing a moment of crisis of confidence. In contrast, a "rotation" from digital assets back to physical assets appears to be underway.

ETF fund flow data from January 2026 most vividly illustrates this rotation. On one side, Bitcoin spot ETFs experienced net outflows of $1.7 billion over 11 trading days; on the other, capital is flooding into silver at an unprecedented scale.

On January 27, the world's largest silver ETF, iShares Silver Trust (SLV), saw its single-day trading volume skyrocket to $32 billion, topping the global ETF trading volume chart for the day.

The market frenzy doesn't stop there. Among the top ten by volume, ProShares Ultra Silver (AGQ)—a 2x leveraged long silver ETF—also made the list, ranking fifth.

This indicates that the capital flowing into silver includes not only funds seeking stable allocation but also a significant amount of speculative forces chasing high-multiple returns.

ETF Trading Volume Ranking on January 27

Retail enthusiasm had already been high previously. 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.

Capital is exiting Bitcoin ETFs and flowing into precious metal ETFs represented by gold and silver. Behind this lies investors' reassessment of the risk-reward profiles of these two asset classes.

Rumors circulating explain this capital flow, suggesting the US government cracked Bitcoin wallets, with the "Crown Prince Group's" 127,000 Bitcoins (worth approximately $15 billion) directly transferred to US government wallets.

Simply put, this portion of capital believes Bitcoin is not secure. Coupled with news such as quantum computing potentially cracking Bitcoin's algorithm, this is driving capital to accelerate its shift towards gold and silver.

From a price perspective, Bitcoin's marginal gains every four years are diminishing, while silver has just emerged from a decade-long consolidation at its lows. In 2025, against the backdrop of a 175% surge in silver prices, Bitcoin's price fell over 30% from its highs. Entering 2026, the divergence in their price movements has become even more pronounced.

As Bitcoin's narrative begins to waver and capital seeks new directions, silver, with its transformed fundamentals, is becoming the darling of this era.