Silver Steals The Anti-Fiat Crown

As the books close on 2025, global markets have witnessed a definitive shift in capital flows, driven by a singular, overarching theme: the flight from fiat currency. While the year was transformative for precious metals, with silver delivering a parabolic performance, the digital asset class faced a more complex reality. Bitcoin, despite hitting fresh all-time highs, struggled to maintain momentum, highlighting the rotational nature of the "anti-fiat" trade.

Undoubtedly, the standout performer of the year was silver. For years, the metal had been a laggard, trading significantly below its 2011 highs even as gold shattered records. However, 2025 marked a violent structural break. After testing resistance at the $35 per ounce level in early spring, the metal staged a breakout that evolved into a mania-like rally.

Silver futures closed the year with a staggering 142.6 per cent gain. This move was fuelled not just by industrial demand, but by a repricing of hard assets in an era of fiscal expansion. However, the speed of the ascent—driven by aggressive positioning—has necessitated a cooling-off period. After failing to breach the $80 handle, prices have retreated. For technical analysts, the $65 level is now viewed as a critical area of support. A consolidation here could offer a reprieve for bulls looking to re-enter the market in early 2026, assuming the macro drivers remain intact.

The relationship between gold and Bitcoin in 2025 offered a fascinating case study in asset rotation. Gold began its rally in early 2024, reacting to dovish signals from the Federal Reserve. This momentum carried the yellow metal through the $2,000 barrier and eventually past $4,500. The driver was clear: central bank accumulation and a hedge against debasement.

In contrast, Bitcoin’s path was more volatile. The cryptocurrency surged to a fresh record of $125,000 in October, seemingly capitalising on the same liquidity waves lifting gold. Yet, as the year concluded, Bitcoin showed a net loss for the timeframe, having retraced significantly to find support around $75,000. This divergence suggests that while both assets serve as alternatives to fiat currencies, market participants often rotate between them based on short-term sentiment and positioning. When gold consolidates, crypto often runs, and vice versa.

The underlying force propelling these assets is the perception of currency dilution. With government budget deficits ballooning and spending fuelled by artificially low interest rates, investors are seeking assets that cannot be inflated away by legislative decree.

Looking ahead to 2026, the US government appears set to deploy a potent combination of lower interest rates and fiscal stimulus measures, colloquially dubbed the "Big Beautiful Bill". While this liquidity is generally supportive of asset prices, it carries the inherent risk of reigniting inflation.

Interestingly, a flare-up in inflation during 2026 could ultimately benefit the anti-fiat thesis. While initial inflation spikes might prompt profit-taking—similar to the price action seen in 2021 and 2022—any subsequent pullbacks could provide attractive entry points for long-term investors. Unless there is a pivot towards genuine austerity and balanced budgets—a scenario deemed unlikely by most strategists—the fundamental argument for holding scarce assets like gold, silver, and Bitcoin remains robust.