Silver Markets Respond to a Surge in Tokenized Trading and Global Sentiment Shift
On February 1 2026, the silver market experienced a dramatic swing that reverberated across physical, futures, and digital arenas. At the close of New York Mercantile Exchange trading, silver settled at $85.25 per ounce, a sharp decline from its 52‑week high of $121.30 that had been reached on January 28. The price was still well above the 52‑week low of $28.31, yet the daily drop represented nearly a 30 % slide from the previous session’s high.
Digital‑Backed Demand Fuels a New Record
The most notable catalyst for the market’s volatility was the unprecedented volume of tokenized precious‑metal trading reported by the BTC China (BTCC) exchange. BTCC announced that, for the first time, tokenized silver trading reached $301 million in a single day—an increase that dwarfs past totals and signals a growing appetite for digital representations of physical silver. Two separate BTCC releases, both issued at 15:27 and 15:21 UTC, confirmed that the surge was driven largely by heightened speculative interest and by institutional investors seeking the liquidity and transparency that tokenized assets offer.
This spike in digital demand came at a time when traditional silver prices were already in flux. While the exchange’s records highlighted a robust appetite for tokenized silver, the underlying physical market was reacting to a different set of forces.
Macro‑Economic Concerns and Investor Sentiment
Financial commentary from Kansas.com (22:55 UTC) and BitcoinEthereumNews.com (19:21 UTC) underscored the broader macroeconomic backdrop. The former piece warned that a “Warsh Fed” scenario—characterized by aggressive tightening—could erode the perceived safety of precious metals, pushing investors toward other assets. The latter article described the day as “the worst ever for silver,” linking the decline to a broader retreat from risk‑bearing commodities.
Across Asia, markets echoed the downturn. Indian exchanges reported sharp falls in silver prices on the Multicombity Exchange (MCX), with daily lows dipping as low as ₹45,000 per kilogram (approximately $55 per ounce) on the basis of “Fed fears and budget jitters.” Similar headlines appeared in Livemint and The Hindu Business Line, where analysts noted a steep decline from the recent record highs above $118–$121. The consensus was clear: the combination of tightening monetary policy and fiscal uncertainty was dampening demand for the metal.
Impact on Silver‑Focused Funds and Mining Stocks
The rally in tokenized silver, while notable for its size, did not translate into sustained gains in the physical market. Investor sentiment remained negative, as reflected in the performance of junior silver‑miner ETFs. Reports from Boerse‑Express and Navbharat Times highlighted a sharp sell‑off in silver‑mining portfolios, with many investors pulling back after last week’s record‑low prices.
Meanwhile, the gold‑silver ratio—a key indicator for commodity traders—slumped below its historical averages, as detailed in a Livemint analysis. Gold prices had surged 73 % over the previous year, outpacing silver and widening the spread. This divergence added to the narrative that silver was becoming a less attractive hedge in a tightening economic environment.
Conclusion
The day’s events illustrate the complex interplay between digital innovation and traditional commodity dynamics. While tokenized silver trading reached record volumes on BTCC, the physical market continued to slide, driven by macroeconomic anxieties and shifting investor appetites. As the market digests these developments, traders and investors will likely monitor both digital and physical channels closely, assessing whether the surge in tokenized demand can ultimately support a rebound in spot and futures prices.
