End of 2025 Market Turmoil: Cryptocurrencies Tested and the Rise of Silver Demand

Year in Review: The Cooling of Crypto Investments and Capital Flows

As 2025 is nearing its end, the cryptocurrency market is likely to be recorded as a cold year. Looking at the annual return rates across the entire dollar market, cryptocurrencies rank at the bottom, with the main reason for this downturn being the sharp correction in Q4. In particular, over the past month, trading volumes on CEX and the New York Stock Exchange have continued to decline, and volatility is converging. This period can be seen as a time for market participants to adopt a wait-and-see approach and reorganize rather than pursue aggressive strategies.

Changes in Capital Inflows: Precious Metals Market Takes Center Stage

An interesting phenomenon is that, in the recent month, precious metals have taken the spotlight over cryptocurrencies in capital markets. Notably, silver has shown remarkable movement, with monthly trading volumes on the Shanghai Silver Market exceeding 75 trillion yuan. Options positions on COMEX have swollen to several times the actual market inventory, reminiscent of the crypto market boom in 2020–2021.

At the same time, tracking the relative price strength of gold and Bitcoin since October indicates that, for the first time since the 2020 monetary easing, they are testing the long-term upward trend’s peak. This phenomenon suggests that capital at high prices is more clearly rotating into other assets, indicating a temporary increase in inflows from cryptocurrencies to precious metals.

Short-term Volatility Convergence and Risks of High-Frequency Trading

As capital exchanges within narrow ranges gradually come to an end, high-frequency traders are facing the disappearance of short-term profit opportunities. In this environment, rapid price movements such as “technical breaks” and “flash crashes” could become significant risk factors. Therefore, this adjustment period should be dedicated to position reorganization and market structure review.

Potential Support Factors and Outlook for 2026

On the other hand, there are some positive factors in the market. MicroStrategy continues to hold significant positions in the NASDAQ 100 index, and the Federal Reserve’s guidance suggests further clarification, increasing transparency in the financial environment. Additionally, the potential correction risk of the AI bubble is expected to provide a supporting effect for the market in 2026.

Currently, the market is in an extended consolidation phase that has been ongoing since the end of 2024, with prices experiencing wide fluctuations. During this ebb and flow, market participants should accumulate energy and prepare for the coming year with a more systematic perspective.