Silver was one of the best-performing major assets in 2025. It performed much better than gold and Bitcoin.
The rise was not just due to speculation. It was precisely due to a rare combination of macroeconomic changes, industrial demand, and geopolitical pressure. This could also continue into 2026.
Silver performance in 2025 in perspective
In December 2025, the silver price stood around $71 per ounce, more than 120% higher than at the beginning of the year. Gold rose during the same period by about 60%, while Bitcoin closed the year slightly lower after a volatile period with a peak in October. The silver price started 2025 around $29 per ounce and increased throughout the year. The gains accelerated in the second half of the year as the silver shortage grew and industrial demand surprisingly increased.
Gold also rose significantly, from about $2,800 to above $4,400 per ounce. This was due to falling real interest rates and demand from central banks.
Yet silver rose much harder than gold, which fits with the habit that silver reacts more strongly in periods of rising precious metals.
Bitcoin followed a different path. In October, the price nearly reached $126,000, but then dropped significantly, to about $87,000 by the end of December.
Unlike precious metals, Bitcoin failed to benefit from a flight to safety during unrest at the end of the year.
Macro-conditions favoring hard assets
In 2025, silver was primarily supported by multiple macroeconomic factors. Notably, global monetary policy shifted towards easing. The U.S. Federal Reserve lowered interest rates several times this year, leading to lower real interest rates and a weaker dollar.
At the same time, inflation remained a concern. This combination is often favorable for tangible assets, especially for assets with both monetary and industrial functions.
Unlike gold, silver directly benefits from economic growth. That dual role made the difference in 2025.
Industrial demand became the core engine
The rise of silver was increasingly supported by physical demand rather than investment flows. About half of all silver consumption is used in industry, and that share is still growing.
The transition to sustainable energy played a significant role. Solar energy remained the largest source of new demand, while electrification of transport and infrastructure added extra pressure on the already tight silver supply.
Globally, there was a silver shortage for the fifth consecutive year in 2025. The supply could not grow, as most silver production comes as a byproduct of other mining and hardly from actual silver mines.
Electric vehicles create structural demand
Electric vehicles led to a strong increase in silver consumption in 2025. Each electric vehicle contains 25 to 50 grams of silver, which is about 70% more than a gasoline-powered car.
As global sales of electric vehicles grew by double digits, the demand for silver in the automotive industry rose annually to tens of millions of ounces.
Charging stations also reinforced that trend. Fast charging stations use kilograms of silver in their electronics and connections.
Unlike erratic investment demand, the silver need for electric vehicles is structural. More production directly means more physical demand for silver.
Defense spending quietly tightened supply
The demand from the military became less visible but increasingly important. Modern weapon systems use a lot of silver for control electronics, radar, communication, and drones.
A single cruise missile can contain hundreds of ounces of silver, which is completely lost upon use. Therefore, defense demand is not suitable for recycling.
Worldwide, military spending reached an all-time high in 2024 and continued to rise in 2025, partly due to wars in Ukraine and the Middle East.
Europe, the United States, and Asia have all increased their procurement of advanced munitions and are quietly incorporating physical silver.
Geopolitical shocks reinforced the trend
The geopolitical tensions made the case for silver even stronger. Prolonged conflicts led to greater stockpiles in defense, while trade splits heightened concerns over the supply security of essential materials.
Unlike gold, silver is positioned precisely at the intersection of national security and industrial policy. Various governments have begun to designate silver as a strategic material because it is important for both civilian and military technologies.
This situation created a peculiar feedback loop: geopolitical risk led to an increase in demand for safe investments and the actual industrial use of silver.
Why 2026 could extend the outperformance
Looking ahead, most factors that drove the silver price in 2025 are still present. Electric vehicles are rapidly gaining popularity. Expansion of the power grid and investments in renewable energy remain important for policy. Defense budgets continue to rise.
At the same time, the supply of silver remains limited. New mining projects take a long time to become operational, and recycling cannot compensate for the rising industrial loss due to military consumption.
Gold can continue to perform well as long as real interest rates remain low. Bitcoin may recover if risk acceptance improves. But neither combines protection against financial risks with direct exposure to global electrification and defense spending.
This combination explains why many analysts expect that silver is uniquely well-positioned for 2026.
The silver rally of 2025 was not a one-time speculative spike. It was caused by profound structural changes in the way the global economy consumes this metal.
If current trends continue, the dual role of silver as both monetary protection and industrial necessity may ensure that it performs better than both gold and Bitcoin again in 2026.
