Written by: EeeVee

"In the past 8 years, Bitcoin has not outperformed silver."

When this statement began circulating among traders, a re-evaluation of silver's value had already begun.

On January 27, the price of silver surged by 16% during trading, reaching a historic high of $117.73 per ounce, with its market cap increase over the past 12 months being twice that of Bitcoin's total market cap.

On that day, the world's largest silver ETF, iShares Silver Trust (SLV), saw a trading volume of $32 billion, which is 15 times its average daily volume, even surpassing the combined total of the S&P 500 ETF (SPY), Nvidia (NVDA), and Tesla (TSLA), making it the most traded security globally.

The trading volume of the silver ETF $SLV reached $32 billion in a single day yesterday.

Silver, an ancient precious metal, has been dormant at the bottom for nearly a decade. Why has it suddenly been embraced by the market? The notion that it is merely a sentiment-driven hype in the precious metals sector seems a bit thin.

In fact, the narrative around silver is shifting from "the poor man's gold" to "a necessity for industrial growth," and its fundamentals are undergoing a profound structural transformation. Whether from industrial demand, monetary attributes, or institutional movements and ETF inflows, silver seems to be welcoming its "Bitcoin moment."

Explosion of Industrial Demand

One of the key reasons for the rise in silver prices is an ongoing, irreversible industrial revolution.

The development of new industries such as photovoltaics, electric vehicles, and AI has led to an unprecedented steep demand curve for silver due to technological iterations and market expansion.

Photovoltaics

The turning point for silver demand in the photovoltaic industry occurred in 2022. Prior to this, the industry commonly used PERC battery technology, with relatively stable silver consumption. However, as the industry transitioned to higher efficiency battery technologies, the demand for silver paste surged.

Conductive silver paste is a core material for photovoltaic cells, and there are currently no viable alternatives. By 2024, the global silver consumption for photovoltaics is expected to reach 6,147 tons, accounting for nearly 30% of total global silver demand, a scale comparable to the total demand for silver jewelry.

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

According to data from the China Photovoltaic Industry Association (CPIA), the cost of silver paste now accounts for 53% of the non-silicon costs of photovoltaic cells, transforming it from a "secondary material" to a "primary material" as important as silicon.

Faced with a surge in silver prices from $25 to $115, photovoltaic companies are not insensitive. Leading companies like Longi Green Energy have explicitly pointed out in their financial reports that the rising cost of silver paste has severely squeezed profits. However, the reality is that, without mature alternative solutions (such as electroplated copper) being commercially viable on a large scale, they can only passively accept it.

New Energy Vehicles

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

Each pure electric vehicle uses 2 to 3 times more silver than traditional fuel vehicles. For example, according to analysis, a typical EV battery pack (100 kWh capacity, about 200 cells) requires approximately 1 kilogram of silver per vehicle.

If we calculate based on BYD's projected sales of 4.3 million vehicles in 2025, the silver demand from this single company could reach 4,300 tons. Additionally, the silver-based solid-state battery technology that BYD is promoting may further increase silver usage in the future.

AI Data Centers

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

Although it only accounts for 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%. An Nvidia H100 server contains 1.2 kilograms of silver, far exceeding the approximately 0.5 kilograms used in traditional servers.

Rigid Supply

Moreover, the current supply of silver is struggling to keep pace with demand. About 70% of the world's silver is a byproduct of mining copper, lead, zinc, and other metals, which means that silver supply is "rigid" and cannot be quickly increased based on price.

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

Awakening of Monetary Attributes

Gold-Silver Ratio

In addition to industrial demand, silver's long-suppressed monetary attributes are also being reawakened by the market. To understand this, the key lies in the gold-silver ratio, which indicates how many ounces of silver are needed to purchase one ounce of gold.

The value of gold is almost entirely supported by its monetary attributes, while silver possesses both industrial and monetary attributes. In traditional economic cycles, when the economy is in recession, shrinking industrial demand drags down silver prices, while safe-haven demand boosts gold prices, leading to a higher gold-silver ratio.

For example, after the 2008 financial crisis, global industrial production stagnated, leading to a sharp decline in silver demand from the automotive and electronics industries, while investors flocked to gold for safety, causing the gold-silver ratio to exceed 80 at one point. Conversely, during economic recovery, a rebound in industrial demand can drive up silver prices, causing the gold-silver ratio to fall. After the global manufacturing sector rebounded post-pandemic in 2020, the gold-silver ratio dropped from a historical high of 123 to 65.

However, this pricing logic is undergoing a profound transformation. Against the backdrop of a shaky global dollar-dominated fiat currency credit system, the "currency" attributes of precious metals are being reactivated.

Trend of the gold-silver ratio

Currently, the gold-silver ratio has fallen below 50, having been halved from last year's 103, reaching a new low in nearly 14 years. Historically, the long-term average of the gold-silver ratio has been between 60-70, and falling below 50 is a clear signal of silver's value re-evaluation.

Investors buying gold and silver are no longer merely seeking traditional safe-haven or industrial applications; they are also hedging against the depreciation risk of fiat currencies. Silver's monetary attributes are being activated in tandem with its industrial attributes, making it a medium for value storage alongside gold.

The "Second Dragon" of Precious Metals

The significant drop in the gold-silver ratio, in addition to the demand for silver's fundamentals, is also driven by a rotation of funds.

In the precious metals sector, gold is undoubtedly the "leader," while silver is the more elastic "second dragon." When monetary attributes become the main theme of market pricing, silver, which is cheaper and historically more volatile, naturally attracts funds seeking higher returns.

According to nearly 50 years of data from the Chicago Mercantile Exchange (CME Group), five out of six significant corrections of the gold-silver ratio occurred during bull markets for gold.

Once a bull market for gold is established, funds tend to rotate into silver, which has greater elasticity, in pursuit of excess returns. The performance in 2025 perfectly illustrates this: gold rose by 67.5%, while silver surged by 175%, 2.6 times that of gold.

The significant decline in the gold-silver ratio reflects the market's rotation of funds from gold to silver. Investors are not only buying precious metals to hedge against risks but are also chasing the higher potential returns of silver compared to gold.

The Biggest Bull: JPMorgan Chase

One of the most intriguing signals in the market comes from JPMorgan Chase. It was fined a staggering $920 million by the U.S. Department of Justice and the Commodity Futures Trading Commission (CFTC) in 2020 for long-term manipulation and suppression of silver prices.

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

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

In June to October 2025, JPMorgan Chase closed about 200 million ounces of paper short positions, and then within just six weeks from November to December 2025, it increased its physical silver holdings by 21 million ounces.

Since opening a new warehouse in November 2021, JPMorgan Chase has gradually taken over all silver inventories of SLV.

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

Regarding the reasons for JPMorgan Chase's shift, analyses from Bloomberg and Reuters generally believe that part of the reason is its advance knowledge of the enormous and rigid demand for silver from Chinese photovoltaic and new energy companies through client transactions.

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

This series of operations has been interpreted by the market as Wall Street's top "smart money" betting on an epic silver market. When a former price manipulator becomes the largest holder, silver immediately enters a frenzied bull market.

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

While the fundamentals of silver are exceptionally strong, Bitcoin, once considered "digital gold," seems to be facing a crisis of trust. In contrast, a "rotation" from digital assets back to physical assets is occurring.

Data on ETF fund flows in January 2026 visually illustrates this rotation. On one side, Bitcoin spot ETFs saw a net outflow of up to $1.7 billion within 11 trading days; on the other side, funds are pouring into silver at an unprecedented scale.

On January 27, the trading volume of the world's largest silver ETF, iShares Silver Trust (SLV), soared to $32 billion, topping the global ETF trading volume rankings for that day.

The market's enthusiasm does not stop there. Among the top ten trading volumes, ProShares Ultra Silver (AGQ), a leveraged ETF that doubles down on silver, also made the list, ranking fifth.

This indicates that the influx into silver is not only from funds seeking stable allocations but also from a large amount of speculative forces seeking high multiples of returns.

Ranking of ETF trading volumes on January 27

Retail enthusiasm had already been high prior to this. According to VandaTrack, in the 30 days leading up to January 15, retail traders invested over $920 million into silver-related ETFs, marking the largest single-month inflow on record.

Funds are flowing out of Bitcoin ETFs and into precious metal ETFs represented by gold and silver. Behind this is a reassessment by investors of the risk-reward ratios of the two assets.

There are rumors that can explain this flow of funds, as the U.S. government managed to decrypt Bitcoin wallets, with the Prince Group transferring 127,000 Bitcoins directly into the U.S. government's wallet, valued at approximately $15 billion.

In simple terms, this portion of funds believes that Bitcoin is unsafe. Coupled with news that quantum computing could crack Bitcoin's algorithms, this has driven funds to accelerate their choice of gold and silver.

From a price perspective, the marginal effect of Bitcoin's price increase every four years is diminishing, while silver has just emerged from a decade-long bottom consolidation. In 2025, against the backdrop of a 175% increase in silver prices, Bitcoin's price fell over 30% from its highs. As we enter 2026, the divergence in the trends of the two assets is becoming increasingly apparent.

As the narrative around Bitcoin begins to waver and funds start seeking new directions, silver, with its changing fundamentals, is becoming the darling of this era.

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