How Much is Silver Worth? Does it Compete with Bitcoin?

Silver is usually described as “poor man’s gold,” although it has more similarities with copper.

In the 1980s and 1990s, silver went through a period of appreciation, but the trend reversed over the last 2 decades. Thus, its value distanced itself from gold.

How much is the silver market worth?

The market value of all silver ever mined is at $1.35 trillion. The calculation considers the current price of $24 per ounce (28.35g). Then, this value is multiplied by the estimate of the silver extracted to date, at 1.6 million tons.

A recent analysis by UBS recommends investors to “get out” of precious metals, as “silver may fall to $22”. Since June, the metal has accumulated 14% losses, versus gold’s 4%.

Silver is more volatile than gold, as its price fluctuates more strongly, both up and down. For example, silver reached its $50 historical high in 2011, and it would have to rise 106% to achieve such a level.

What is the use of silver?

In addition to being relatively scarce, therefore protecting against inflation, it benefits from the large industrial demand, responsible for 44% of its use. Thus, as global industrial activity recovers, demand can be expected to rise. Its second-largest use is in jewelry and adornments, with 18% of the annual production.

Previously, silver had been used mainly as currency and investment. Today, it is used in solar panels, water filtration, jewelry, utensils, and chemical reactions.

Where to trade silver?

CME and CBOE offer futures contracts. In the U.S. markets, there is an ETF, a fund listed on the stock exchange, which invests only in physical silver (SLV, offered by iShares). There is another ETF that invests in silver mining companies (SIL, offered by Global X). Both have low management fees, therefore interesting for portfolio diversification.

An allocation in precious metals acts as a hedge against the devaluation of fiat money. As governments continue to stimulate the economies, the trend for scarce assets remains favorable.

Is gold the most precious metal?

No, palladium is by far more valuable, albeit with little trading volume. Precious metals include gold, silver, platinum, palladium, rhodium, ruthenium, iridium, and osmium.

Gold and silver are the most important for trading and are more widely known. However, other metals are commonly used for jewelry industry coating, known as rhodium plating.

silver compared to bitcoin

Curious fact: a mechanic shop in Minneapolis (USA) had more than 60 automobiles with their exhausts sawed; thieves were looking for rhodium, housed inside the catalysts, used to filter the pollutants.

At what price does Bitcoin surpass silver?

In April 2021, Bitcoin’s market capitalization passed the $1.2 trillion mark, which is still below silver’s.

The ‘flippening’ will occur when the Bitcoin price surpasses $73,000, taking its market capitalization to $1.4 trillion.

Silver Squeeze: The Wallstreetbets phenomenon

In early February, silver gained the spotlight. Some believe Reddit’s WallStreetBets speculators triggered the move.

Silver futures contracts reached $30 with a record volume of $940 million.

However, silver vastly differs from stocks such as GameStop (GME), which also became widely known after speculation arising from the same social network. The attempt to increase the commodity price collided with the huge holdings of large investors.

In fact, in early March, prices returned to their previous levels, thus eliminating the effects of the attempt to put pressure on investors who carried ‘short’ positions, therefore betting on the price weakness.

In a nutshell, if millennials want to pump assets, they will have better luck picking Bitcoin as its large holders seem to HODL despite price rallies.

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