Is silver still a safe bet? Here’s why my journey from precious metals to Bitcoin changed everything.
Bitcoin’s price once flashed a crazy low, sparking panic and confusion. But behind that brief crash was a complex story of liquidity, stablecoin swaps, and market mechanics. As someone who’s sold all my silver and gold to bet on Bitcoin, I want to share what I learned — including why silver can’t keep pace with inflation like Bitcoin can, and why understanding these market dynamics matters to every investor.
Read on to discover the real reasons to rethink silver, how Bitcoin’s fixed supply offers a unique edge, and what this means for your portfolio going forward.
What Really Happened When Bitcoin’s Price Momentarily Crashed
Last week, Bitcoin’s price on Binance briefly plunged to $24,111 — a shocking drop from its recent levels above $86,000. It looked like a flash crash worthy of headlines, but the truth was more nuanced.
- The crash was on a low-liquidity trading pair (BTC/USD1) on Binance.
- This pair dropped 72% for about 3 seconds.
- Meanwhile, major stablecoin pairs like BTC/USDT or BTC/USDC didn’t budge from normal prices.
- Binance had just launched a 20% APY promotion on USD1 stablecoins.
- Traders rushed to swap USDT to USD1 for yield chasing.
- This drained sell-side liquidity in Bitcon/USD1, meaning one large sell order hit an empty order book.
- Result: a momentary price collapse that almost no one else saw or cared about.
Simply put, this wasn’t a true market-wide crash but a liquidity issue on one illiquid pair.
Why I Sold All My Silver to Buy Bitcoin
I’ve been involved with silver for about half a decade before discovering Bitcoin. Back in 2013, I made a radical shift:
- Sold all silver and gold holdings.
- Cashed out other assets like my car and life insurance.
- Committed fully to Bitcoin because I believed it was the most undervalued asset globally.
Here’s why:
- Bitcoin has a capped supply of 21 million coins — it can’t be inflated away.
- Precious metals like silver and gold don’t have a fixed supply; mining increases supply as prices rise.
- Nobody knows the total above-ground or underground silver supply because there’s no transparent ledger like blockchain.
- Bitcoin’s transparent supply and deflationary design make it a superior inflation hedge.
The Silver vs. Bitcoin Price Ratio Tells a Story
Here’s a mind-blowing comparison from 2011 vs. today:
| Year | Bitcoin needed to buy 1 ounce of silver |
|---|---|
| 2011 | 3 BTC to buy 1 oz silver |
| 2024 | 1,113 oz silver to buy 1 BTC |
This shift shows how Bitcoin has dramatically outperformed silver. If you want a store of value that keeps up with inflation and scarcity, Bitcoin is the better asset.
Why Bitcoin Beats Precious Metals as an Inflation Hedge
The U.S. is printing money at a historic pace. With nearly $38 trillion in debt and millions living under the poverty line, the value of the U.S. dollar is eroding. Lower interest rates to ease borrowing are shrinking the middle class and widening wealth inequality.
- Bitcoin’s scarcity and fixed supply protect against this devaluation.
- Precious metals supply can increase with mining, potentially diluting value.
- Bitcoin’s price rise is uncapped but supply is strictly limited.
- Digital, portable, and censorship-resistant — Bitcoin fits the future of money better than silver.
Answer Box: Why Should Investors Consider Selling Silver for Bitcoin?
Investors might consider selling silver for Bitcoin because Bitcoin has a capped supply of 21 million coins, making it a superior inflation hedge. Unlike silver, which can be mined continuously, Bitcoin’s supply is transparent and limited, offering potential for long-term value appreciation as the US dollar weakens.
Data Callout: Bitcoin’s Fixed Supply vs. Silver’s Unknown Supply
- Bitcoin supply capped at exactly 21 million coins.
- Silver’s above-ground and underground supply unknown and increasing due to continuous mining.
- The increasing silver supply can dilute its value.
- Bitcoin cannot be “printed” or inflated beyond this supply cap.
Risks: What Could Go Wrong?
- Bitcoin is highly volatile; price swings can be large and fast.
- Regulatory risks: governments may impose restrictions on cryptocurrencies.
- Silver and gold have long histories as stores of value and can provide diversification benefits.
- Market adoption of Bitcoin is still evolving; it may not replace traditional safe havens immediately.
Investors should consider their risk tolerance and personal financial goals before shifting from silver to Bitcoin.
Actionable Summary
- The recent Bitcoin flash crash was a liquidity issue, not a market collapse.
- Bitcoin’s capped supply provides a unique inflation hedge advantage over silver and gold.
- Silver’s supply is unknown and grows with mining; Bitcoin’s does not.
- Bitcoin is more resistant to devaluation caused by excessive currency printing.
- Selling silver to buy Bitcoin can be an effective way to protect wealth long-term but watch for volatility and risk.
For a deeper dive on navigating Bitcoin markets, mastering entry points, and avoiding common mistakes like panic selling or using leverage, check out today’s Wolfy Wealth PRO brief. It’s packed with detailed setups, risk management rules, and real-time alerts to help you build wealth smartly in the crypto age.
FAQ
Q: Why did Bitcoin’s price briefly drop to $24,111?
A: A 72% price drop happened on one low-liquidity Binance pair (BTC/USD1) for about 3 seconds. It was caused by traders rushing stablecoin swaps in response to a 20% APY yield promo, not a market-wide crash.
Q: Is silver a good investment compared to Bitcoin?
A: Silver has value but does not have a fixed supply, and its total supply is unknown. Bitcoin’s capped supply and deflationary design give it a better chance to preserve wealth against inflation.
Q: Can Bitcoin mining increase supply like silver mining?
A: No. Bitcoin’s supply is strictly capped at 21 million coins; new coins can only be created until that cap is reached, unlike silver where mining can increase the available supply indefinitely.
Q: How does U.S. monetary policy affect Bitcoin and silver?
A: U.S. currency printing devalues the dollar, potentially benefiting Bitcoin due to its scarcity. Silver may see price increases but can be diluted as more is mined.
Q: Is it safe to invest only in Bitcoin?
A: Bitcoin is volatile and subject to risks. Diversification is recommended, and investors should understand their risk tolerance before concentrating assets in Bitcoin.
Disclaimer: This article is for educational and informational purposes only. It does not constitute investment advice or recommendations. Crypto investments carry risk and you should do your own research.
By Wolfy Wealth - Empowering crypto investors since 2016
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Disclosure: Authors may be crypto investors mentioned in this newsletter. Wolfy Wealth Crypto newsletter, does not represent an offer to trade securities or other financial instruments. Our analyses, information and investment strategies are for informational purposes only, in order to spread knowledge about the crypto market. Any investments in variable income may cause partial or total loss of the capital used. Therefore, the recipient of this newsletter should always develop their own analyses and investment strategies. In addition, any investment decisions should be based on the investor's risk profile
