Silver overtakes bitcoin on volatility as year-end trading thins

Bitcoin BTC$86,488.43 and silver are sending sharply different signals to markets as the year closes, with volatility data showing traders actively repricing one asset while leaving the other stuck in neutral.

Over the past month, bitcoin’s annualized 30-day realized volatility has steadily compressed into the mid-40s, reflecting a market that remains range-bound and short on conviction. At 45%, the 30-day realized volatility is well below its 365-day average of 48%, according to TradingView data.

That may seem large compared to a blue chip stock, but it's nothing compared to silver, the semi-precious, industrial metal.

Silver's realized volatility has surged into the mid-50s, driven by a sharp rally, widening physical premiums, and stress across global bullion markets. Realized or historical volatility represents actual price swings of an asset over a specific period.

The volatility divergence is consistent with the price performance of the two assets. While silver is up over 151% this year, BTC is down nearly 7%.

Silver’s massive price surge is explained by demand-supply mismatch. While demand from solar panels, electric vehicles, electronics and battery technologies has risen sharply, supply has failed to keep the pace.

In addition, China has decided to impose export licensing on silver starting Jan. 1 has tightened physical supply expectations, while prices in Shanghai and Dubai have traded $10 to $14 above COMEX.

The London forward curve has slipped into a steep backwardation, a sign of immediate scarcity, even as futures markets show limited stress, analysts argue.

Bitcoin, meanwhile, trades nearly 30% below the record high of over $126,000 reached in October. Traders widely blame fading demand for spot ETFs and the DAT narrative losing steam for the ongoing price slump alongside the Oct. 10 crash that auto-deleveraged winning bets, denting investor confidence.

In a recent note, QCP Capital said bitcoin’s recent price action reflects mechanical forces rather than a shift in sentiment. The firm wrote that holiday-thinned liquidity has amplified short-term moves, while last week’s large options expiry reset dealer positioning.

QCP added that roughly 50% of open interest rolled off after expiry, leaving significant capital sidelined and reinforcing the lack of directional conviction.

Prediction markets reflect this split. On Polymarket, tied to silver price levels by the end of January, show high confidence that prices remain elevated, with limited belief in a sharp collapse but only modest odds assigned to near-term blow-off tops.

Bitcoin markets, meanwhile, overwhelmingly price continuation of the current range. Traders assign a roughly 70% probability that bitcoin holds above $86,000 through early January, while the odds of a breakout above $92,000 fall below 25%.