Interest in silver is spilling over into tokenized markets, with onchain trading volume rising in parallel with activity in futures and exchange-traded funds (ETFs) as the metal experiences volatility after hitting successive record highs throughout the month.
Data from RWA.xyz shows that the monthly transfer volume for its tokenized version of the iShares Silver Trust (SLV) has increased more than 1,200% over the past 30 days, along with a roughly 300% increase in owners and a nearly 40% increase in net asset value.
Tokenization involves representing real assets, such as private equity, real estate, commodities and more, as digital tokens on a blockchain. The process helps make the assets more tradable and divisible, opening up new opportunities for fractional ownership and liquidity.
The tokenized silver trust, for example, allows non-US investors to gain exposure to SLV with the ability to mint, redeem and transfer tokens around the clock.
Pricing in physical markets has diverged sharply from futures pricing, with analysts pointing to premiums in Asia reaching double-digit levels above the COMEX and the London forward curve sitting in reverse – meaning the metal at close to $80 a barrel. ounce costs more today than in the future, a sign of near-term supply stress.
Silver’s rally has been driven by a convergence of supply constraints, structural demand and macro tailwinds that have tightened physical markets.
Analysts point to China’s decision to impose export licenses for refined silver from Jan. 1 as adding to worries about supply availability – rising prices – while higher futures margins and year-end positioning have complicated trading in traditional venues.
At the same time, demand from the solar industry continues to rise, and silver consumption tied to solar production remains largely inelastic, even after prices more than triple from 2024 levels.
Silver’s onchain rally in parallel with its TradFi counterpart appears to be another data point to demonstrate that tokenized versions of assets are a trend here to stay.
