Why Has Silver Surpassed Bitcoin in Volatility During Year-End Trading?

During the last two weeks of December 2025, silver’s price volatility exceeded that of Bitcoin, a notable reversal given Bitcoin’s historical reputation for price swings. This shift occurred amid declining liquidity in silver exchange-traded funds (ETFs) and rising macroeconomic uncertainties linked to Federal Reserve tightening expectations. Understanding these dynamics sheds light on how traditional and digital asset markets respond differently to year-end trading conditions and broader economic signals.

What happened

In the closing weeks of 2025, silver’s 10-day historical volatility climbed to approximately 8%, surpassing Bitcoin’s 6% over the same period, according to CoinDesk market data. This marked a departure from typical patterns, where Bitcoin generally exhibits higher volatility than silver.

Concurrently, trading volumes in silver ETFs, particularly the iShares Silver Trust (SLV), fell sharply—by nearly 30% compared to the average daily volume recorded in the preceding quarter. This decline in liquidity was confirmed by iShares’ official filings and trading data. In contrast, Bitcoin trading volumes on major exchanges such as Coinbase and Binance remained stable or even increased slightly during this period, as reported by Coin Metrics.

Macroeconomic factors played a significant role. Rising U.S. Treasury yields and heightened expectations of Federal Reserve interest rate hikes contributed to increased uncertainty around traditional financial assets. Bloomberg macroeconomic reports and official Federal Reserve statements indicated that such tightening pressures tend to have a more pronounced impact on silver prices, given silver’s dual role as both an industrial and monetary metal.

Market analysts and CoinDesk editorial commentary interpret these developments as a function of liquidity dynamics and differing sensitivities to macroeconomic risk. The liquidity drop in silver ETFs amid a period of rising macroeconomic uncertainty amplified price swings in silver. Meanwhile, Bitcoin’s relative stability is attributed to consistent retail and institutional participation, reflecting a maturing digital asset market that maintains liquidity even during traditionally thin trading periods.

Further analysis from sources such as the World Gold Council and CoinDesk highlights that silver is more sensitive to inflation expectations and interest rates, while Bitcoin’s price movements are influenced more by digital asset-specific factors, including regulatory developments and adoption trends.

Why this matters

This volatility divergence between silver and Bitcoin during year-end trading reveals important structural differences between traditional and digital asset markets. Silver’s increased volatility amid declining liquidity underscores its dependency on physical market conditions and sensitivity to macroeconomic risk factors such as interest rates and inflation expectations.

The contrasting stability in Bitcoin markets suggests that digital assets have developed market infrastructures—such as stablecoin liquidity and derivatives markets—that can buffer price fluctuations even when traditional markets thin out. This resilience may reflect evolving investor behavior, where digital asset holders maintain or increase exposure during year-end periods, while traditional asset investors reduce positions for reasons including tax-loss harvesting and portfolio rebalancing.

Such distinctions have broader implications for portfolio management, risk assessment, and regulatory oversight. Understanding how liquidity and macroeconomic factors differentially impact asset classes can inform market participants and policymakers about potential vulnerabilities and the evolving nature of cross-asset interactions.

What remains unclear

Despite these insights, several key questions remain unanswered. The extent to which specific institutional flows—such as hedge funds or commodity trading advisors—contributed to the liquidity decline in silver ETFs is not publicly documented. Similarly, the role of physical silver supply chain factors, including inventory changes or disruptions, in driving the observed volatility is not clarified by available data.

On the Bitcoin side, detailed information about the influence of derivatives markets, such as futures and options, on price stability during this period is limited due to proprietary constraints on exchange order books and positioning data. Furthermore, it is unclear whether shifts in investor demographics or behavior within silver markets coincided with the volatility spike.

Finally, the interaction between cross-market trading strategies, including algorithmic arbitrage between physical and digital asset markets, remains unexplored in the current reporting. These gaps highlight the complexity of isolating precise causal mechanisms behind volatility patterns.

What to watch next

• Disclosure of detailed institutional flow data for silver ETFs to assess the impact of large trader activity on liquidity and volatility.
• Reports or data releases on physical silver inventories and supply chain conditions during year-end 2025 to evaluate their role in price dynamics.
• Further analysis or transparency from Bitcoin exchanges and derivatives platforms regarding futures and options positioning around year-end trading.
• Monitoring Federal Reserve communications and U.S. Treasury yield movements, as ongoing macroeconomic policy shifts will continue to influence silver and other traditional asset prices.
• Research into investor behavior trends in both traditional and digital asset markets, particularly focusing on year-end portfolio adjustments and tax-related trading activity.

The observed volatility crossover between silver and Bitcoin during year-end 2025 underscores the nuanced interplay of liquidity, macroeconomic risk, and market structure in shaping asset price behavior. While the data confirms silver’s heightened sensitivity to traditional financial factors and liquidity constraints, Bitcoin’s relative stability points to maturing digital asset market mechanisms. Nevertheless, the absence of detailed institutional and supply chain data limits a full understanding of the underlying drivers, emphasizing the need for greater transparency and further research into these evolving market dynamics.

Source: https://www.coindesk.com/markets/2025/12/30/silver-overtakes-bitcoin-on-volatility-as-year-end-trading-thins. This article is based on verified research material available at the time of writing. Where information is limited or unavailable, this is stated explicitly.