On January 30, silver experienced a large bearish 'cliff' drop, plummeting 30% intraday. Many people's first reaction was: isn't this just like the 'Hunt brothers' doomsday crash in 1980? The scene does indeed look similar — but the essence is actually completely different.
The silver of 1980 was a typical case of 'single force control + artificial monopoly + regulatory finality'. The Hunt brothers created a bubble through funds and chips, only to be directly overturned by the exchange rules, which is a pure manipulation event. Today’s round is more like 2011: the participants are not a single consortium, but institutions, retail investors, ETFs, and industrial capital collectively pushing the market into an overheated zone; the bubble is not 'controlled' by any individual, but is 'brought up' in the macro narrative, supply-demand tension, and crowded trading. History won't repeat exactly, but the rhymes will always be quite similar.
Rewind to 2011, and you will find that the crash of that year was not a "sudden event," but rather a "logical conclusion." After the financial crisis, global QE filled the market with liquidity, gold stood above 1500, the threshold was too high, and silver was treated as a "low-threshold alternative." Rising from 8.5 to 20, it began to accelerate, reaching 49.83 in April 2011 — the most terrifying aspect of this rise was that it almost did not require fundamental explanations, only faster capital, higher leverage, and denser emotions.
That was a typical positive feedback loop: prices rise → funds chase → ETF increases positions → futures open interest skyrockets → more people leverage to rush in → prices continue to rise. In the first quarter of 2011, silver ETF holdings surged, futures trading doubled, and retail investors entered with leverage, even leading to a grassroots frenzy of "financing to speculate on silver." At the same time, the decline in delivery inventory was exaggerated into a "shortage narrative," with the expectation of squeezing positions hypnotizing the market. The bubble grew larger and larger until the exchanges began to intensively raise margins — at that moment, the market was no longer determined by "bullish people," but by "who can withstand additional margin calls."
The results are well known: margin hikes triggered Margin Calls, forcing funds to reduce positions, and sell orders concentrated and crashed out; combined with geopolitical sentiment cooling, the dollar rebounding, and large funds withdrawing early, the stampede happened in an instant. In just over ten trading days, silver plummeted more than 30% from its high, and then continued to decline over the next few years, completely burying the last ones who got on board during the "parabolic" trend. This is not a "wrong direction," but an inevitable outcome of "structural imbalance + crowded leverage."
Looking at the plunge in 2026, on the surface, it is almost a mirror image of 2011: first irrational surges, tight delivery, crowded leverage, and then exchanges and the brokerage system began to tighten risk (increased margins and risk control), ultimately triggering a chain reaction of high-leverage capital liquidation, completing the de-bubbling in the fastest way. What you see as a cliff-like candlestick is essentially "liquidity suddenly disappearing" — it's not that no one wants to buy, but rather that no one dares to catch the falling knife when you are liquidated.
However, in 2026, there are underlying differences that did not exist in 2011, which determines that the subsequent situation will not simply replicate the "four-year bear market." First, the fragility of the dollar system is far greater than it was back then. In 2011, the dollar was still an absolute anchor, and a single statement from the Federal Reserve could change global pricing; now, however, issues of dollar credit, fiscal and debt problems, and the stronger narrative of trade protection and global division have led to a more solidified demand for long-term allocation of capital towards "hard assets." Second, the rigid contradiction in silver supply and demand is more pronounced. In 2011, it was more of a speculative-driven bubble, while the current structural growth in industrial demand (such as photovoltaics, AI/semiconductors, and new energy vehicles) makes the "practical attributes" of silver more robust, making it easier for the supply-demand gap and inventory pressure to form medium to long-term support after a drawdown. Third, the geopolitical environment is more complicated, with risk premiums more frequent, which will cause silver to be sharply volatile in the "de-bubbling — re-pricing" process, rather than a smooth journey.
Therefore, I prefer to define this plunge as a forced shift from "emotion-driven" to "structure-driven". In the short term, it kills leverage, squeezes crowded trades, and clears the last batch of chasing gains; in the medium to long term, the three things that truly determine whether silver can rise again are: the dollar's credit and real interest rates, whether global industrial demand can continue, and whether the inventory/supply-demand gap can continue to tighten.
Finally, a realistic reminder: the danger of silver has never been about "misjudging the direction," but rather about "volatility exceeding the capacity to bear it." In extreme cases in 1980, the drawdown could approach 95%, and from the peak in 2011 to the subsequent years, it also approached 80%. The allure of silver lies in its elasticity, and its lethality also lies in its elasticity. Even if you are correct in the long term, as long as your position, leverage, or stop-loss is wrong once, there may be no next time.
How deep will this round of drawdown be? I don’t know. But what is certain is that the real winners are not the "ones who dare to bottom-fish," but rather the "ones who can survive to the next round."
