Interest in silver is spilling into tokenized markets, with onchain trading volumes rising in parallel with activity in futures and exchange-traded funds (ETFs) as the metal experiences volatility after hitting successive record highs all month.
Data from RWA.xyz shows the monthly transfer volume for its tokenized version of the iShares Silver Trust (SLV) has jumped more than 1,200% over the past 30 days, alongside a roughly 300% increase in holders and a near 40% rise in net asset value.
Tokenization involves representing real-world assets, such as private equity, real estate, commodities and more, as digital tokens on a blockchain. The process helps make the assets more easily tradable and divisible, opening up new possibilities for fractional ownership and liquidity.
The tokenized silver trust, for example, allows non-U.S. 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 pricing of futures, with analysts pointing to premiums in Asia reaching double-digit levels over COMEX, and the London forward curve sitting in backwardation — meaning that at close to $80 an ounce the metal costs more today than in 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 licensing on refined silver starting Jan. 1 as adding to concerns around supply availability — raising prices — while higher futures margins and year-end positioning have complicated trading in traditional venues.
At the same time, demand from the solar-power industry continues to rise, with silver consumption tied to photovoltaic manufacturing remaining largely inelastic even after prices more than tripled from 2024 levels.
Silver's onchain rally in parallel to its TradFi counterpart seems to be another datapoint to demonstrate that tokenized versions of assets are a trend that's here to stay.
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