As the market opened on Feb. 1, 2021,
precious metal futures jumped 10%, almost breaching $30 per ounce.
So who is behind silver's sudden and meteoric price rise? Will other stocks, commodities, or even cryptocurrencies see similar price booms? Multiple news outlets, including
Bloomberg, have associated silver's meteoric rise with so-called anti-establishment redditors. Besides GameStop, the WallStreetBets subreddit has been buying up numerous other stocks, including Nokia, BlackBerry, and AMC. However, users and moderators of the platform have aggressively distanced themselves from the attempted silver short squeeze. The talk of a potential silver short squeeze on r/WallStreetBets - often abbreviated to WSB - began on Jan. 27. A dedicated
post claimed that the precious metal's price could go from $25 to $1,000, following a successful short squeeze. The tide quickly turned against those advocating purchasing silver and its derivatives. A popular post on the subreddit
loudly proclaimed, "There is no silver short squeeze happening. NONE. NEVER."
Many WallStreetBets subscribers believe that the silver price surge will benefit the very entities the subreddit has been rallying against. Indeed, leading firms and hedge funds are some of the
largest holders of the precious metal. Investment firm Citadel owns approximately six million silver shares. Banks like Morgan Stanley, Bank of America, and Wells Fargo own as much as double the number of shares. Citadel is one of the two firms that
infused close to $3 billion into Melvin Capital, the notorious hedge fund that is betting against GameStop. WSB users reasoned that an increase in silver price will benefit these custodians much more than the average retail investor. Buying shares backed by physical silver, on the other hand, could cause a substantial supply drought, redditors
argued. This difference in supply and demand could put pressure on market participants to deliver large amounts of the precious metal. Many hope that this will quickly catapult silver price, similar to how GameStop's share price skyrocketed, last month. Other users also pointed out that the calls for a silver short squeeze were concentrated from users with new accounts. This discovery lent some credence to earlier claims that the subreddit had been infiltrated by agent provocateurs. Over the past week, WSB members have also
alleged that the silver squeeze could be a "coordinated attack" from Wall Street firms.
