Silver surged 10.21% overnight, reaching an all-time high of $79.25 on December 27.
The gains come amid growing demand for solar panels, electric vehicles (EVs) and artificial intelligence (AI) hardware.
However, the price spike is also a warning sign that one of the world’s most important industrial metals is running short.
Related: Rich Dad Poor Dad author says silver will surpass Bitcoin
China, which controls 60% to 70% of world silver production, will implement new export controls from January 1, 2026.
Under the new rules, companies must obtain a government license to export silver, with qualifications limited to state-approved companies with an annual output of at least 80 tons and holding a $30 million credit line.
The move effectively deterred small and medium-sized exporters, reducing international supply almost overnight.
According to Statista, global silver supply is approximately 1 billion ounces. Analysts estimate that a supply shortage of 115 million to 120 million ounces this year is tightening global inventories as mine output fails to meet consumption for the fifth consecutive year.
Silver’s total market capitalization has now topped $4 trillion, driven by October’s short squeeze and renewed safe-haven demand amid global interest rate cuts and geopolitical tensions.
The physical silver market is becoming increasingly illiquid, with buyers reporting delivery delays and bullion premiums rising.
Traders and experts warn that above-ground reserves are rapidly being depleted as vault inventories fall to multi-year lows.
Venture capitalist Max Reif warns,
“Demand for silver solar panels grew 64% last year, surpassing jewelry as the single largest source of demand. This was enough to push the market into a supply deficit over the past four years. At the same time, solar energy accounts for only 9% of global electricity production and accounts for about 2% of total energy production today.”
Tesla CEO Elon Musk comments on silver supply crisis,
“That’s not good. Many industrial processes require silver.”
Silver has become an industrial bottleneck and is critical to the technologies driving the clean energy transition, from electric vehicle components and batteries to photovoltaic cells and semiconductors.
While Tesla does not publicly disclose total company-wide silver consumption, industry estimates suggest that battery electric vehicles (BEVs) like Tesla typically use about 25 to 50 grams of silver per vehicle. Electrical contacts, power electronics and control systems consume approximately 0.8–1.6 troy ounces per vehicle.
As China tightens exports and global inventories plummet, shortages could spread to electric vehicle, solar and electronics manufacturing, potentially driving up costs and slowing output growth.
The rise in silver prices has created a buzz among cryptocurrency traders. Some are beginning to recommend switching investments from silver to Bitcoin (BTC).
Cryptocurrency trader Ash Crypto sees this as an opportunity for Bitcoin traders.
“This liquidity will shift to Bitcoin and cryptocurrencies in 2026,” they said.
Analyst James Van Straten believes that Bitcoin is better suited than precious metals to handle growing liquidity without disrupting the overall economy.
“This is why the United States needs to hide future inflation and liquidity in Bitcoin rather than metals,” Van Straten said. “Bitcoin price increases will not have any impact on the system.”
But not everyone agrees. Market commentators Wall Street experts counter that comparisons between silver and Bitcoin miss the point,
“Bitcoin enthusiasts say, ‘Sell silver and buy Bitcoin because it’s easier to move.’ They misunderstand why silver is rising. Silver is the best conductor of electricity — it’s irreplaceable in industry. The shortage is real. Mines have been short for five years and coffers are running dry. Prices have to rise to rebalance supply and demand.”
At press time, Bitcoin was trading at $87,448.81, according to CoinGecko.
Related: Analysts warn dollar king is dead, predict silver rebound
This article was originally published by TheStreet on December 27, 2025, and first appeared in the Markets section. Click here to add TheStreet as your preferred source.