Key Insights
- •Silver’s record rally indicates a rotation of funds away from the crypto market.
- •ETF outflows and liquidations have contributed to the weakness in crypto prices over recent weeks.
- •The silver-to-Bitcoin ratio has surged by 146%, suggesting traders are currently favoring precious metals.
Silver has achieved a record price of approximately $58 per ounce, while cryptocurrency prices are facing challenges. The price of silver has increased by over 100% in 2025. It is important to note that gold has also seen a strong surge, but silver is appreciating at an even faster rate.
Concurrently, the cryptocurrency market remains subdued following a significant downturn in November. Furthermore, December has not started positively for crypto assets.
This divergence has led many traders to question why capital is flowing into precious metals instead of cryptocurrencies, especially since both markets are typically influenced by interest rate changes. A clearer picture emerges when considering supply constraints, expectations for interest rate cuts, ETF flows, and the silver-to-Bitcoin price ratio.
Silver Moves Higher as Crypto Market Struggles
Silver's ascent this year is attributed to multiple factors.
Inventories in both London and Shanghai have diminished to very low levels, making silver less accessible.
The significant demand from solar panel manufacturers also sustains strong interest in silver, even during economic downturns. These two elements have collectively driven the price higher throughout the year.
Traders are also anticipating an imminent interest rate cut. Recent data indicates an 89% probability of a rate cut in December. Precious metals typically perform well when interest rates decrease, as they do not offer yields, and lower rates make them more attractive holdings.
However, the cryptocurrency market is not exhibiting a similar positive reaction and experienced a gloomy start to December.
Bitcoin has fallen by approximately 30% from its October peak. Crypto exchange-traded products in the United States experienced outflows totaling nearly $3.4 billion in November. Notably, silver is now outperforming the S&P 500.
A decentralized finance (DeFi) hack also negatively impacted market sentiment, leading to over $1 billion in leveraged positions being liquidated during the sell-off. These combined factors have kept the cryptocurrency market weak, even as precious metals have risen.
When comparing the two markets, silver is acting much like an "altcoin" within the precious metals sector.
It is demonstrating faster price movements than gold and is highly responsive to supply pressures, while cryptocurrency prices are experiencing a period of stagnation as buyers await improved liquidity conditions.
Key Chart Shows Clear Move Away From Crypto Prices
The silver-to-Bitcoin ratio provides insight into current capital flows. This ratio stood at approximately 0.00028 in January 2025.
By December 2025, it had reached about 0.00069, marking an increase of around 146%. Such a significant shift typically signifies strong inflows into silver relative to the crypto market.
Social media sentiment also reflects this trend. Some traders are reporting that silver has "made more money than crypto" in 2025. Others anticipate the price reaching $63 in the near future.
While some analysts caution that a pullback to the $44–$46 range might occur, the overarching trend remains consistent: more investors are focusing on precious metals due to their upward momentum while Bitcoin is declining.
This development is significant for the cryptocurrency market, as precious metals tend to perform well during periods when investors seek safer assets.
When silver and gold appreciate at a faster pace than cryptocurrencies during a rate-cut cycle, it often suggests that traders remain cautious. They may delay significant investments in the crypto market until ETF inflows improve and broader market conditions become more favorable.
Can the Crypto Market Recover Anytime Soon?
The cryptocurrency market has experienced a decline of over 30% from its October high and is still in the process of recovery. The market requires new inflows of capital before it can regain its leadership position.
Bitcoin typically responds positively to interest rate cuts, but this rally usually follows an improvement in liquidity. Currently, silver is the stronger asset due to high demand and shrinking supply.
A potential rate cut in December could benefit Bitcoin at a later stage, but the immediate advantage has gone to precious metals. Another rate cut in December could be a decisive factor in determining the future direction of capital flows.
The primary question now is straightforward: If silver continues its current trajectory, will Bitcoin, or the broader cryptocurrency market, recover in the next phase of the rate-cut cycle, or will precious metals continue to capture investor attention for an extended period?