Silver: History, Markets & the Math of Supply

Quick Summary

Silver has served as everyday money, a political symbol, and an investment asset for thousands of years. Two events stand out in its modern history:

1. The Coinage Act of 1873 — A U.S. law that quietly removed silver from the coinage system, sparking decades of political outrage and earning the nickname the "Crime of 1873."
2. November 28, 2025 — Silver prices shot to all-time highs after a major computer outage shut down the main U.S. silver futures exchange (COMEX) for several hours, while buyers around the world were pushing prices higher.

This page explains both events in plain language, tells you how silver markets work today — including the growing influence of China's Shanghai exchange — and gives you practical things to consider before you ever think about buying silver.

Historical Timeline

• Before 1873 Bimetallism: The United States used both gold and silver as official money. Citizens could bring silver to the mint and have it made into coins.
• Feb 12, 1873 Coinage Act of 1873: A new law modernized the U.S. mint system but quietly dropped the standard silver dollar from the list of coins. Silver lost its right to be coined freely.
• 1870s–1890s "Crime of 1873" controversy: As silver prices fell and economic hardship spread, farmers, miners, and politicians accused the government of secretly rigging the law to benefit bankers. The term "Crime of 1873" became a rallying cry.
• 1878 Bland–Allison Act: Congress forced the U.S. Treasury to buy silver each month and coin it into dollars — a partial win for the silver movement.
• 1890 Sherman Silver Purchase Act: Increased the amount of silver the government had to buy. The law was repealed in 1893 when it was blamed for a financial panic.
• Early 1900s Gold standard wins: The U.S. officially adopted the gold standard in 1900. Silver's role as money faded, though it remained important in coins for decades.
• 1944–1971 Bretton Woods era: The world pegged currencies to the U.S. dollar, which was tied to gold. Silver became mainly an industrial and collectible metal.
• 1971 Nixon closes the gold window: The U.S. ended the dollar's link to gold entirely. All major currencies became "fiat" — backed by government trust, not precious metals. This revived interest in gold and silver as stores of value.
• 1980 Silver spikes to ~$50/oz: The Hunt Brothers of Texas tried to corner the silver market, driving prices to a then-record high before regulators stepped in and prices collapsed.
• 2010s–2020s Renewed interest: Low interest rates, government money-printing, and geopolitical instability drove more investors toward precious metals as a hedge against inflation.
• Nov 28, 2025 COMEX outage & all-time high: A cooling system failure at a major data centre shut down COMEX trading for hours. Silver prices surged to record highs above $55–$56 per ounce.

The Coinage Act of 1873 — "Crime of 1873"

In 1873, the U.S. Congress passed a law to update and simplify the rules for making coins. On the surface, it looked like routine bookkeeping. But buried in the fine print was a major change: the standard silver dollar — the large coin that ordinary Americans used — was dropped from the list of coins the government would produce.

At the time, this change went almost unnoticed. But over the next few years, silver prices fell sharply, farm incomes collapsed, and debt became harder to repay. People started looking for someone to blame.

Why Did It Hurt So Many People?

Under the old bimetallic system, if you were a farmer or a silver miner, you could bring your silver to the mint and have it turned into coins at a fixed rate. That gave silver a guaranteed buyer — the government itself. The 1873 law ended that right.

Less silver in circulation meant the money supply shrank. When there is less money around, prices fall, debts become harder to pay, and wages get squeezed. Farmers who had borrowed money to buy land found their crops selling for less, but their loan payments stayed the same.

Why "Crime"?

Critics — led by politicians like William Jennings Bryan — argued that the law was deliberately written to benefit Eastern bankers and foreign bond holders who preferred a gold standard because it kept the money supply tight and preserved the value of the money they were owed. They called it a "crime" because it transferred wealth from working people to creditors, and because it was done quietly without public debate.

The COMEX Outage — November 28, 2025

COMEX (the Commodity Exchange) is the main U.S. marketplace where silver futures contracts are bought and sold. It is owned by CME Group and operates on a computer system called Globex. On November 28, 2025, a cooling system failure at the CyrusOne CHI1 data centre in Chicago caused COMEX to go offline for several hours.

What Happened to Silver Prices?

At the same time as the outage, there was already very strong buying pressure in the silver market. With the main U.S. futures exchange down, buyers and sellers had to trade on other markets — London, over-the-counter desks, and platforms in Asia. Strong demand hitting fewer available sellers pushed prices sharply higher.

What Does This Tell Us?

The November 28 event highlighted two important things about silver markets:

1. Concentration risk: When the world's main silver futures exchange goes down — even for a few hours — it can cause extreme price swings. Markets depend on reliable infrastructure.
2. Underlying demand: The outage alone did not cause the spike. Demand was already building due to concerns about inflation, currency debasement, and geopolitical uncertainty. The outage simply removed a major shock absorber at the worst possible moment.

Trading resumed later that day and prices eventually settled, but the event was a reminder of how fragile even the largest commodity markets can be.

Understanding Silver Price Moves

Silver prices can be confusing. They go up and down for many reasons at once. Here is a plain-language breakdown of what usually moves the price:

• Industrial demand: Silver is used in solar panels, electronics, medical devices, and electric vehicles. When demand for these products rises, so does silver demand.
• Safe-haven buying: When people are scared about the economy, war, or bank failures, they often buy gold and silver as a "safe place" for their money.
• Inflation and currency concerns: When governments print a lot of money and prices rise, silver (like gold) becomes more attractive because it holds its value better than paper currency over long periods.
• Interest rates: When interest rates are low, silver becomes more attractive — you are not giving up much by holding a metal that pays no interest. When rates are high, silver becomes less attractive.
• Futures market positioning: Large investors and funds buy and sell billions of dollars of silver futures contracts. Their moves can push prices sharply in either direction, even if the fundamental supply and demand picture has not changed.
• Technical and operational events: Like the November 2025 COMEX outage — disruptions to market infrastructure can amplify price moves dramatically.

The Shanghai Silver Market — Why It Matters Today

Most people in North America think of silver prices in terms of COMEX in New York or the London Bullion Market. But a third major force has been rising steadily: the Shanghai Futures Exchange (SHFE) in China.

What Is the Shanghai Futures Exchange?

The SHFE is China's main commodity futures market. It trades contracts for metals including silver, gold, copper, and aluminum. It operates under Chinese government oversight and prices are quoted in Chinese yuan (renminbi). Trading hours overlap with Asian markets and partially with European markets, meaning Shanghai silver trading affects global prices even before North American markets open each day.

How Does China Influence Global Silver Prices?

China is the world's largest industrial user of silver. Chinese factories manufacture a huge share of the world's solar panels, electronics, and electrical components — all of which require silver. When Chinese industrial demand rises or falls, it moves the entire global silver market.

Beyond that, Chinese investors increasingly view silver as a store of value and a hedge against their own currency's purchasing power. Retail silver buying in China has grown significantly, adding another layer of demand that didn't exist a generation ago.

COMEX vs. London vs. Shanghai — Key Differences

• COMEX (New York): The dominant futures exchange for silver price discovery in the West. Contracts are in U.S. dollars. Primarily used by financial investors, funds, and hedgers. Most silver price "benchmarks" you see in North American news come from COMEX.
• London Bullion Market: The world's largest over-the-counter physical silver trading hub. The "LBMA Silver Price" is set twice daily and used as the reference price for most physical silver trades globally — bars, coins, and industrial supply contracts.
• Shanghai Futures Exchange (SHFE): The dominant Asian futures exchange. Prices in yuan. Reflects Chinese demand directly. When the SHFE price diverges significantly from COMEX or London, it creates "arbitrage" — traders buy where silver is cheap and sell where it is expensive, which eventually pulls prices back together across all markets.

Why Shanghai Matters More and More

China's growing economic weight means the SHFE is increasingly a price-setter, not just a price-follower. Several developments make Shanghai more important:

• China's massive solar energy build-out is consuming record amounts of silver, and Chinese futures prices reflect that demand first.
• The Chinese government has been encouraging greater use of the yuan in commodity trade, which means more silver contracts priced in yuan rather than dollars.
• In times of stress — like the 2025 COMEX outage — Asian markets including Shanghai absorbed some of the excess buying pressure, meaning Shanghai's prices moved global prices that day.
• Global investors now watch the SHFE silver price alongside COMEX and London as part of a complete picture of the market.

What Is the "Math of Extinction"?

This is not a metaphor about the end of the world. It is a supply-and-demand calculation with a very simple conclusion: if the world's industries consume more silver each year than mines can produce, the stockpiles of silver sitting in warehouses and vaults will eventually run out.

The term "extinction" refers to the potential exhaustion of above-ground silver inventories — the refined silver bars and coins held by exchanges, banks, and industrial users. Once those are gone, any shortfall must be made up by sharply higher prices that ration what little is available.

This page explains why some analysts believe we are already on that path — and what the actual numbers look like.

Why Is Silver So Important to Industry Now?

Silver has always been used in industry — photography, mirrors, medical instruments. But three technologies have dramatically increased demand in the 21st century:

1. Solar Panels

Every solar panel contains silver. It is used as an electrical contact paste — the thin lines on a solar cell that collect and carry electricity. Silver conducts electricity better than any other affordable metal, and there is no good substitute that works as well.

In 2024, solar panels consumed approximately 232 million troy ounces of silver — nearly one-fifth of the entire global silver market. Demand from solar is growing every year as countries race to install renewable energy.

2. Electric Vehicles (EVs)

Every electric vehicle uses more silver than a conventional car. Silver is used in charging contacts, circuit boards, sensors, and switches. The automotive industry used roughly 80 million ounces of silver in 2024. That figure is expected to exceed 90 million ounces in 2025 as EV sales climb globally.

3. Solid-State Batteries — The Next Frontier

The most exciting — and potentially largest — new source of silver demand is solid-state batteries. Samsung and other manufacturers are developing batteries that use a thin silver-carbon (Ag-C) composite layer in the anode (the negative end of the battery). This layer helps prevent a dangerous problem called "lithium dendrite" growth, which causes fires and failures in ordinary batteries.

Samsung's solid-state battery prototype can charge to 80% in just nine minutes, lasts an estimated 20 years, and stores nearly double the energy of today's best batteries. The trade-off: each battery pack may require approximately 1 kilogram (about 32 troy ounces) of silver per vehicle.

The Core Equation — Running the Numbers

The original "Math of Extinction" calculation focuses on solid-state battery demand. Here is how it works in plain language:

To put that in perspective: the entire world currently mines only about 820–835 million ounces of silver per year from all sources combined. Solid-state EV batteries alone — if adopted at scale — would require more silver than the entire planet currently produces.

Solar Demand Adds Even More Pressure

Even without solid-state batteries, solar panels alone are consuming silver at a pace that strains supply. Look at how industrial silver demand has grown:

Sources: Silver Institute, Sprott Asset Management, Money Metals Exchange. Moz = millions of troy ounces.

Why Supply Cannot Simply Keep Up

You might assume that if silver prices rise, mines will just produce more. In most industries, higher prices do bring more supply. But silver mining has unique characteristics that make a rapid supply response very difficult.

Silver Is Mostly a Byproduct

More than 70% of the world's silver comes out of the ground as a byproduct of mining other metals — primarily copper, lead, and zinc. Miners dig these operations for those metals, and silver is what comes along for the ride. If silver prices double but copper prices don't, miners do not have a strong incentive to dig new copper mines just to get more silver.

Long Permitting and Construction Times

Opening a new mine takes years — often 10 to 15 years from discovery to production. Environmental assessments, permits, financing, construction, and testing all take time. A silver price spike today cannot translate into new mine supply for many years.

Declining Ore Grades

The richest silver deposits in the world were mined long ago. The ore that remains tends to contain less silver per tonne than what was mined in previous decades. That means miners must move more rock to produce the same amount of silver — a trend that raises costs and limits how fast output can grow.

Global Mine Production — The Hard Numbers

Source: Silver Institute, USGS, Farmonaut Mining Analysis. Moz = millions of troy ounces.

The Supply Deficit — Six Years and Counting

A "deficit" means the world is consuming more silver than it produces. The difference comes from existing stockpiles — bars held by exchanges like COMEX and London Metal Exchange, government reserves, and industrial inventory.

The silver market has been running a deficit every single year since 2021. Here is what that looks like:

Sources: Silver Institute, StoneX, Bunker Group, AdvisorPerspectives. Totals include recycling as part of supply. Projections vary by source.

The cumulative deficit over five years (2021–2025) is estimated at more than 800 million ounces — nearly a full year of global mine production consumed from stockpiles.

Locked Supply — Silver That Does Not Come Back Quickly

One feature of industrial silver demand that makes the math especially tight is that much of it becomes hard to recover quickly.

Silver in Batteries

When silver is embedded in a solid-state EV battery, it is locked inside the battery pack for the life of the vehicle — likely 10 to 20 years. Recycling the silver requires specialized processes that are not yet at scale. The world does not yet have the recycling infrastructure to recover significant quantities of battery silver quickly.

Silver in Solar Panels

Solar panels are designed to last 25–30 years. The silver inside them is effectively removed from the market for that entire period. Recycling old solar panels is possible but expensive and not widely practiced. Hundreds of millions of panels installed over the past decade still have their silver locked inside them.

The Recycling Gap

Silver recycling does exist — from old jewellery, coins, photographic film, and electronics. Recycled silver contributes roughly 15–20% of total annual supply. But recycling capacity takes years to build and cannot quickly compensate for a structural shortfall in mine production.

What Does All of This Mean for Silver Prices?

The honest answer is: no one knows exactly. Markets are complex and prices depend on many factors at once. But the structural argument for higher silver prices over time runs like this:

1. Demand is rising structurally — driven by solar, EVs, AI data centres (which use silver in electronics), and eventually solid-state batteries. These are not speculative trends. They are backed by government policies, capital spending, and engineering realities.
2. Supply cannot respond quickly — for geological, regulatory, and economic reasons. More than 70% of silver comes as a byproduct that cannot easily be increased.
3. Above-ground inventories are being drawn down — every year of deficit reduces the buffer that keeps prices stable. At some point, inventory levels fall low enough to cause price dislocations.
4. Locked supply from batteries and panels — means a growing portion of existing silver cannot return to the market for a decade or more.

Silver hit a then-record price near $50/oz in 1980 and again in 2011. It set new all-time highs above $55–$56/oz in November 2025. Some analysts, including those at Carbon Credits and StoneX, have published forecasts suggesting silver could reach $100/oz if the structural deficit continues and industrial demand scales as projected. These are forecasts, not guarantees.

Key Things to Watch

If you are interested in following the silver market, these are the most important indicators to monitor:

Summary — The Plain-Language Version

Here is the entire argument in simple terms:

• Silver is essential for solar panels, electric vehicles, and a new generation of batteries that could power the clean energy future.
• The world produces roughly 820–835 million ounces of silver per year from mines. That number has not grown significantly in nearly a decade.
• Industrial users alone now consume more than 700 million ounces per year — a record. Add jewellery, coins, and investment demand, and total consumption exceeds supply by 40–200 million ounces per year.
• The difference is made up by drawing down stockpiles. The silver market has been running a deficit every year since 2021.
• Silver locked in batteries and solar panels does not come back to the market quickly. Recycling capacity is limited.
• If solid-state EV batteries go into mass production, the demand numbers become very large very fast.
• Higher prices are one mechanism the market uses to eventually balance supply and demand — by making recycling more economical and by dampening some uses. But that process takes time and can be painful for industries that depend on silver.

Things to Consider Before Buying Silver

Silver can be a legitimate part of a diversified financial plan — but it is not right for everyone, and it comes with real risks. Here are five important things to think about carefully:

Recommended Videos

These videos provide additional background on silver's history and markets:

Sources & Further Reading

• TradingEconomics — Silver historical price data and charts
• Reuters — November 28, 2025: silver reaches record high
• Nasdaq / Investing News — COMEX disruption and silver record
• Mining.com — Silver surge and COMEX outage coverage
• BullionVault — Silver at $55 record as CME/COMEX re-opens
• U.S. Mint — "Crime of 1873" official history
• Wikipedia — Coinage Act of 1873 (full text and analysis)
• Investopedia — Crime of 1873 explained
• CME Group — Official COMEX operator
• Why Silver Price Is Too Low — silvermath.html
• Financial False Hope — debt.tedlee.ca
• Silver Institute — Annual World Silver Survey (supply & demand data)
• Silver Institute — Silver demand forecast across technology sectors
• Sprott Asset Management — Silver's critical role in the clean energy transition
• Carbon Credits — Silver supply deficit enters fifth year; $100/oz forecasts
• StoneX — Silver faces another deficit in 2026
• Advisor Perspectives / Money Metals — Sixth straight supply deficit expected 2026
• SilverTrade — Samsung's silver solid-state battery and global silver market impact
• Carbon Credits — Silver solid-state batteries and the future of EV energy storage
• Farmonaut — Global silver mining production 2025 outlook
• GoldSilver.com — Silver industrial demand: solar, EVs, and the supply gap
• U.S. Geological Survey — Silver Mineral Commodity Summary 2025 (PDF)
• Financial False Hope — debt.tedlee.ca

Combined and updated August 19, 2026. Figures and projections should be checked against the linked sources for later revisions.