How Did Silver Become the World's Fifth-Largest Asset?
Silver has recently made headlines by surpassing Microsoft to become the world’s fifth-largest asset, achieving a market cap of $3.59 trillion after exceeding $63 for the first time in history. This impressive run reflects a gain of over 150% since the beginning of 2024, when silver was priced around $25. The surge in silver's value highlights the growing investor interest in inflation protection and its role as an industrial alternative to gold and various digital assets.
This rally marks silver’s significant comeback to record levels, last seen in 2011 when the metal peaked at $50 before experiencing a sharp decline to $15 in subsequent years. Today, silver finds itself ahead of major tech giants like Microsoft and Amazon, which currently hold market caps of approximately $3.6 trillion and $2.5 trillion, respectively. Silver is now also closing in on Alphabet, which has a valuation of $3.8 trillion.
A key factor driving this rally was the recent 25 basis point interest rate cut by the US Federal Reserve. Though this move was largely anticipated, it has sparked bullish trading behavior across the metals markets, positioning silver in a favorable light for investors seeking to hedge against inflation.
Investors must consider these market dynamics closely as silver continues to rise in prominence. The current economic climate, characterized by rate cuts and inflationary pressures, further supports the case for including silver in diversified investment portfolios as a strategic response to potential market volatility.