Silver Surge Challenges Bitcoin as China Tightens Export Controls
The cryptocurrency market continues to face turbulence. In early 2025, tariff disputes led to significant market fluctuations, causing a 18% drop in the total crypto market cap, equating to $500 billion in outflows. As 2026 approaches, a similar trend looms with another economic conflict taking shape.
Silver Price Surge Increases Pressure on Bitcoin
Legacy assets like gold, silver, and platinum are experiencing notable gains, with silver reaching an all-time high of $79/oz, a 70% increase in Q4. This "metal war" is partly driven by China, which will enforce export restrictions on silver starting January 1, 2026.
China controls 60-70% of global silver supply, and its restrictions could lead to a supply-demand imbalance, especially after a surge in silver demand in 2025. This scenario has diverted capital away from Bitcoin, with its Q4 decline of 25% reflecting waning institutional interest.
Institutions Pivot to Silver Over Bitcoin
U.S. investors are shifting towards silver, as indicated by the declining Coinbase Premium Index for Bitcoin. Institutional demand for silver is surging, with 50–60% of supply now held by major investors. China’s export ban is expected to further incentivize silver stockpiling.
Hecla Mining, the largest U.S. silver miner, exemplifies this trend, with shares rising 170% over two quarters. Its market cap has grown from $320 billion to $1.2 trillion, signaling robust demand. Consequently, metals are gaining prominence, while Bitcoin remains under pressure heading into 2026.
Final Thoughts
- Institutional demand for silver is rising, with 50–60% of supply held by major investors.
- Hecla Mining shares surged 170% as China's export controls tighten supply.