Loading ...The Great Silver Divergence: A Binary Bet with Very Early Bitcoin-Level Potential!
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H/T THE HAPPY HAWAIIAN FOR THE CHART
There is a chart making the rounds in the precious metals community that is so stark, so powerful, that it presents a simple, binary choice. It is a chart that screams opportunity, a divergence so extreme that it cannot last.
The resolution of this divergence will either see the price of silver collapse, or it will unleash a rally in the silver mining stocks that will be incredibly powerful.
Take a close look at the chart above. The blue line is the price of silver in 2025, which has been in a powerful uptrend, recently breaking out to new highs above $59. The red line is the ratio of the junior silver miners ETF (SILJ) to the price of silver.
As you can see, for most of the year, they moved in tandem. But over the last month, a massive divergence has opened up. As silver has soared, the miners have fallen off a cliff relative to the metal.
This presents us with a simple, binary bet:
- Either the price of silver is about to collapse, proving the miners were right.
- Or the silver miners are extremely undervalued, and a violent catch-up rally is imminent.
So, which is it? Are you willing to bet that silver will significantly fall in the current environment?
Let’s Dig Into The Following:
- The overwhelming case for a silver super-spike! The monetary demand from investors recognizing the undervaluation squeezes the same finite supply that industrial and strategic players desperately need. This is a perfect storm where silver’s ancient role as money is colliding with its modern role as an irreplaceable industrial commodity.
- Why Even $100+ Silver Won’t Bring a Supply Flood! 70-80% of silver produced is a byproduct of mining other minerals such as lead, copper, zinc, nickel and gold. This means that the supply of silver is not primarily driven by the price of silver, but by the global demand for these other metals. This creates a rare and powerful structural inelasticity that almost no other commodity faces.
- Why are the silver miners being ignored? Many investors were burned by the brutal 2011-2020 bear market in precious metals and are suffering from recency bias, unable to believe that this time is different. They see the miners as toxic, perpetually underperforming assets, and are selling every rally, blinded by the past instead of focusing on the future.
- The early bitcoin parallel! The asymmetric opportunity presenting itself today in the silver miners feels incredibly similar to the early Bitcoin days. The skepticism is rampant. The undervaluation is extreme. The fundamental case is undeniable.
- The inevitable re-rating of these silver mining stocks! If you believe, as the evidence overwhelmingly suggests, that silver is going higher, then the conclusion is inescapable: the silver miners are on the verge of a re-rating that will be unlike anything the majority of investors have ever experienced. …
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