Silver ETFs (Crash) 20%: Speculative Bubble Bust.

Silver ETFs have fallen as much as 20 percent in a savage liquidation of the speculative mania that engulfed markets well into late 2025. Retail investors in search of industrial demand and inflation hedges flooded funds such as SLV and SIVR, and spot prices soared up to 36 per ounce. Profit-taking, margin calls, and evaporating macro tailwinds are now catalysts of mass exits, wiping out billions of paper gains.

​Frenzy Fuels Record Inflows

Last year recorded unparalleled inflows of $4.2 billion into silver ETFs, second only to gold due to speculation in US rate cuts and sustainable energy. The iShares Silver Trust (SLV), 25% YTD at its peak, reflected 2011 mania. Rumours spreading on social media on sites such as the WallStreetSilver sub-reddit increased FOMO, with leveraged positions at the highest level since the financial crisis.

Solar panels, EVs, and electronics demand in the industry supported optimism—the use of silver was set to increase 15 percent in a year. However, retail excess disregarded Mexico and Peru supply fills, as well as recycling booms that kept physical shortages low.

Crash Triggers Cascade

The unwinding commenced in mid-January with Fed signals being late to reduce, and this strengthened the USD and pressured commodities. Spot silver fell 18% off highs of 36.50, pulling ETFs: SLV -19%, SIVR -20.5%, PSLV -17%. Wheaton Precious Metals, which are high-beta miners, fell 22%.

The liquidations were as a result of margin calls on leveraged speculators who were faced with a margin call of $1.2 billion. COMEX futures open interest fell 30 percent weekly, which was corroborated by de-risking. Outflows to ETFs reached $900 million in days, the worst since the 2022 crypto winter.

Macro Headwinds Mount

The collapse of the stimulus in China killed solar demand dreams; EV sales declined due to the decline of subsidies. The PMI of US manufacturing dropped to less than 50, squeezing electronics. The piling up of the inventory in London vaults was a pointer to excess supply, and the premiums were melting.

The map turned: Trump's tariff truce with BRICS relieved flows to the silver haven. Real yields were on the rise, draining non-yield assets. The recovery of Bitcoin swapped speculative thunder.

ETF Mechanics Amplify Pain

Bullion-backed ETFs, such as SLV, have to sell the physical in redemptions, which completes the spiral on itself. The 2.5 million ounces dumped bauthoriseded participants last week were 2.4 million less than the weekly increase of 3.3 million. Leveraged products such as 2x silver futures ETFs crashed 35, washing out leveraged traders.

NAV discounts increased to 2%, which indicated forced selling. Retail holders, who were late to the party, are taxed on phantom intra-year spikes.

Investor Lessons Emerge

This de-purge replicates the 40% silver crash after the hype of 2011. Basics: 200M oz deficit per annum—short-term sentiment. Analysts are looking to 28 for support; break 24 tests.

Gold-silver mixes are the preferred type of diversified portfolios. Physical holdings are recommended by pros in times of liquidity crunch compared to ETFs. The vulnerability of ETFs is demonstrated by the silver silence and gold buys when implemented by central banks.

Road to Recovery?

The Fed pivot and China's recovery are the keys to stabilization. Long-run bulls refer to 1.5B oz solar demand in 2030. But still we have the scars: speculative scars have to wait.

The bloodbath of Silver ETFs reprices valuation, which may sow a subsequent leg up in patient hands. Approaching the end of the retail frenzy, the professionals enter.