Precious Metals Plummet in Historic Sell-Off, Bitcoin Holds Steady Near $83,000
The blistering rally in precious metals came to a screeching halt Friday, with silver leading a historic plunge that wiped out billions in market value within hours. The sell-off marks one of the most violent single-day reversals in the commodity sector in decades.
Silver, which had soared to a record high of $120 per ounce earlier in the day, collapsed to $75 by afternoon trading in New York—a staggering 35% intraday decline. Gold, which broke the $5,000 barrier for the first time just days ago, retreated from a Thursday peak of $5,600 to $4,718, down 12%. Platinum and palladium followed suit, dropping 24% and 20% respectively.
The scale of the move is breathtaking. Silver surrendered nearly all its massive January gains in a matter of hours—a volatility shock reminiscent of the 1980 Hunt Brothers squeeze, but in reverse. For context, the Nasdaq Composite fell 1.25% and the S&P 500 dropped 0.9% during the same session, indicating a broader risk-off sentiment.
In stark contrast, cryptocurrency markets exhibited notable resilience. After a turbulent week, Bitcoin stabilized around $83,000, holding firmly above its weekly low of $81,000. The divergence has reignited a persistent debate among analysts: whether capital fleeing traditional safe havens could fuel the next crypto leg higher.
The catalyst for the sudden rout appears linked to a seismic shift in U.S. monetary policy outlook. President Trump's surprise nomination of former Fed governor Kevin Warsh to replace Jerome Powell as Federal Reserve Chair sent shockwaves through markets. Warsh, perceived as a more hawkish voice, is seen as potentially accelerating the tightening of monetary policy, triggering a rapid re-pricing of inflation-sensitive assets like precious metals.
"We've witnessed a massive, parabolic move in commodities that arguably drew capital away from digital assets," said Paul Howard, Director at trading firm Wincent. "That dynamic may now be at an inflection point." Howard pointed to surging activity in Bitcoin options markets, with over 105,000 call contracts for February changing hands, as evidence of building bullish sentiment for a catch-up rally.
The dramatic session prompted sharp reactions from market observers:
Maya Rodriguez, Portfolio Manager at Sterling Capital: "This isn't just a correction; it's a regime change. The market is forcefully rejecting the 'inflation hedge' narrative for metals, at least in the short term. Bitcoin's stability here is its most compelling advertisement yet as a mature asset."
David Chen, Independent Metals Trader: "The Hunt Brothers comparison is apt—this is panic liquidation. Fundamentals haven't changed overnight, but leverage did. This creates a potential buying opportunity for physical metal, but the speculative froth is clearly gone."
Alex "Rocket" Petrov, Crypto Commentator (The Decentralized Future Podcast): "Finally! The great rotation begins. The dinosaur 'stores of value' are crumbling under their own weight and outdated monetary logic. Smart money isn't going back to bonds—it's going to Bitcoin. This is the validation the crypto space has waited for."
Gina Lowell, Economist at Brookfield Institute: "Attributing this solely to the Warsh nomination is simplistic. We're seeing a confluence of factors: extreme positioning, algorithmic trading amplifying the move, and a broader reassessment of global growth. Bitcoin's resilience is interesting, but it remains part of the high-risk asset cohort and isn't immune to a broader liquidity crunch."