Silver became one of the strongest assets in 2025, outpacing both gold and Bitcoin by a large margin.
The rise was not only due to speculation. It was instead about an unusual combination of significant economic changes, increased industrial demand, and geopolitical events that may continue into 2026.
The development of silver in 2025 in its context
At the end of December 2025, silver was trading near 71 USD per ounce, over 120% higher than at the beginning of the year. Gold increased by about 60% during the same period, but Bitcoin ended the year slightly lower after a volatile journey that peaked in October. The silver price started the year 2025 around 29 USD per ounce and rose steadily throughout the year. Gains accelerated rapidly in the second half as the deficit grew larger and industrial demand increased unexpectedly.
Gold also rose sharply, from around 2,800 USD to over 4,400 USD per ounce, thanks to declining real interest rates and demand from central banks.
But silver rose much more than gold, which often happens when precious metals rise quickly.
Bitcoin took a different path. The price rose to nearly 126,000 USD at the beginning of October but fell significantly and was around 87,000 USD in December.
Unlike metals, Bitcoin failed to maintain inflows as investors sought safety towards the end of the year.
Macro conditions favored hard assets
Several major economic factors helped silver in 2025. The most important was that the central banks around the world began to lower interest rates. The U.S. Federal Reserve lowered rates several times before the year's end, which reduced real interest rates and weakened the dollar.
At the same time, there were ongoing concerns about inflation. Historically, this benefits physical assets, especially those with both monetary and industrial value.
Unlike gold, silver benefits directly from economic growth. This dual role was crucial in 2025.
Industry demand became the most important driving force
The rise of silver was increasingly based on physical demand, not just investments. Industry accounts for about half of all silver usage, and that share is increasing.
The transition to renewable energy played an important role. Solar power was the largest new use, and electrification in transport and infrastructure put even greater pressure on supply.
The global silver market had a fifth consecutive year of deficits in 2025. Supply struggled to keep up, as most silver mines produce silver as a byproduct of other mining, not directly from their own silver mines.
Electric vehicles create increased structural demand
Electric vehicles significantly increased silver usage in 2025. Each electric vehicle uses 25 to 50 grams of silver, nearly 70% more than a conventional combustion engine car.
When sales of electric vehicles surged worldwide, silver usage in the automotive industry rose to tens of millions of ounces each year.
The charging infrastructure reinforced the development. Fast chargers use kilograms of silver in their power technology and connectors.
Unlike fluctuating investment interest, electric vehicle-related silver usage is stable. As production increases, it directly leads to increased physical demand.
Defense spending quietly reduced supply
Military needs became a more important but less visible part. Modern weapon systems use a lot of silver in control systems, radar, secure communication, and drones.
A cruise missile can contain hundreds of ounces of silver that is destroyed upon use. Therefore, it is not possible to recycle the silver used in defense.
Global military spending reached record levels in 2024 and rose further in 2025 due to the wars in Ukraine and the Middle East.
Europe, the USA, and Asia increased their procurement of advanced ammunition while quietly purchasing physical silver.
Geopolitical shocks have reinforced the trend
Geopolitical tensions have strengthened the importance of silver. Prolonged conflicts have led countries to stockpile more defense materials, while divided trade has created concerns about the availability of essential materials.
Unlike gold, silver plays an important role in both national security and industrial policy. Several governments have therefore begun to see silver as a strategic material, as it is used in both civilian and military technologies.
This development created an unusual feedback loop: Geopolitical risk increased demand both as a safe investment and as an industrial raw material.
Therefore, 2026 could provide continued outperformance
Looking ahead, most factors that drove the silver price in 2025 seem likely to persist. More people are buying electric vehicles. The expansion of the power grid and investments in renewable energy remain crucial for politics. Defense budgets are not decreasing.
At the same time, the supply of silver is still limited. New mining projects take a long time to start, and recycling cannot cover the lost silver in industry and the military.
Gold may continue to perform well if real interest rates remain low. Bitcoin could recover if the willingness to take risks increases. But neither of them provides both monetary protection and a direct link to global electrification and defense investments.
This explains why many analysts see silver as particularly strong heading into 2026.
The rise of silver in 2025 was not a temporary price increase. It indicated deep changes in how the global economy uses the metal.
If today's development continues, silver, thanks to its dual role as both financial protection and industrial raw material, may perform better than both gold and Bitcoin even in 2026.
