Why have precious metals soared to a historic high, while Bitcoin has become a "supporting role"?

December 26th, a feast of precious metals unfolds in the global financial markets. Silver surges past its historical high of $75.34, while gold and platinum also hit new record highs. Among them, gold reaches a high of $4,530.60, and platinum soars to $2,413.62. What is behind this scene? What does it mean for the digital asset market?

Why Are Precious Metals So Strong?

Silver’s performance is particularly impressive. Since the beginning of the year, it has increased by 142%, far surpassing gold’s 70% rise, making it one of the best-performing assets globally. By market value, silver has surpassed Apple and Google, ranking third worldwide. Where does this momentum come from?

Rising geopolitical uncertainties are the primary driver. Amid escalating international tariff disputes and economic outlook pressures, investors instinctively flock to traditional safe-haven assets like gold, silver, and platinum. When the world falls into confusion, these “hard currencies” naturally become the first choice.

The Federal Reserve’s policy shift is the second driving force. The US Federal Reserve continues to cut interest rates in 2025—by 25 basis points in September, October, and December, with market expectations of further cuts in 2026. The rate cuts weaken the dollar and reduce the cost of holding non-yielding assets, which is continuously favorable for precious metals.

Industrial demand and supply tightness form the third push. Silver has strong demand in high-tech industries such as semiconductors, solar energy, and electric vehicles, while platinum is widely used in automotive catalytic converters. Supply cannot keep up with demand, naturally pushing prices higher due to scarcity. Notably, some funds are shifting from gold to silver and platinum, further reinforcing the upward trend of the latter two.

In Contrast, Bitcoin Fades

During the same period, Bitcoin’s performance is rather disappointing. The latest data shows BTC trading at $90.49K, down 4.85% year-to-date, underperforming among major asset classes. By market value, Bitcoin has fallen to the eighth position globally, with a market cap of about $1.807 trillion, trailing behind traditional giants like Amazon and Microsoft.

This creates a stark contrast: while precious metals are sought after due to risk aversion, the crypto market is experiencing a correction. Bitcoin, once dubbed “digital gold,” now significantly underperforms its identity.

What Does All This Indicate?

On the surface, the rally in precious metals reflects a shift in market sentiment—risk aversion is rising. Historical experience shows that whenever uncertainty increases, funds tend to move away from risk assets into safe havens.

But from another perspective, this may also signal that the market’s “pendulum effect” is brewing a reversal. The short-term dominance of risk aversion often indicates that uncertainty has peaked. Once these anxieties dissipate, suppressed risk appetite will quickly be unleashed. The selling pressure on Bitcoin will eventually weaken, and new demand will re-emerge.

From an asset allocation momentum perspective, the ebb and flow between precious metals and digital assets is not a zero-sum game. Instead, it serves as a reminder to investors: in a bull market, diversification is the right approach. When traditional safe-haven assets soar, it may also be an opportunity to position for undervalued risk assets.