Silver is regarded as a precious metal. The other well-known precious metals are gold and platinum. I’m not sure if copper falls into this category, but it’s far too prevalent to be considered precious.
Anyway, these resources are deemed ‘precious’ due to the fact that there is so little of them. Silver is about 19 times more common than gold and about 23 times more abundant than platinum. Still, silver should be more useful than all other precious metals, combined!
The industrial sector is responsible for approximately 58 percent of the world’s yearly demand for silver. In contrast, only around 8 percent of the demand for gold can be attributed to industrial application, with the other 92 percent being attributed to the market for numismatic, jewelry, and gold bullion. As a result of this contrast, it shows that gold is purely sought-after for its rarity. Meanwhile, silver is high in demand mainly because of industrial uses.
We know gold is much more expensive than silver (about 80 times more expensive as of now). It’s also true that silver is much more volatile than gold. Silver prices have a long history of volatility, even though there is a lot of demand for it. This signifies silver has a higher potential upside, but at the same time, it is a much riskier commodity than gold. In case you don’t know, traders have always been on the lookout for volatility in the market all the time. Volatility is equivalent to more upside potential while requiring less leverage; less leverage equals fewer fees. As something of a trader myself, silver is without a doubt a superior asset to trade when compared to gold.
When measured in terms of market capitalization, the gold market is far larger than the silver market. A bigger market capitalization almost always results in larger liquidity. Liquidity is a measure of how much money is involved in trading an asset on the exchange. If we’re talking about cryptocurrency, we all know that whales can move the whole market just because of how much money they possess. It is easier to be a whale in a cryptocurrency project with a small market cap. On the other hand, it is hard to be a “whale” in a trillion-dollar market cap like gold ($10 trillion) or silver ($1 trillion). If someone has the liquidity to dump their holdings and create havoc in the market, then the market is more susceptible to being manipulated. Gold is harder to manipulate because it has a larger market cap. On the other hand, silver is simpler to exploit (JP Morgan has been doing it for years). The $GME stocks are a good example of how manipulation can happen when there isn’t much money in the market. If you want an example of manipulation, you don’t have to look any further than that.
