- Is Reddit (Wall Street Silver) Impacting the Silver Market?
In early February 2021, silver made a lot of news headlines. The so called “Reddit Crowd” had managed to run up the price of GameStop stock in a coordinated effort to force a short squeeze. This prompted all kinds of media attention and debate.
Soon thereafter, rumors began to circulate that the Reddit investors might next target the silver market in an effort to force silver prices higher. It was never determined how broad and coordinated this effort was, however new increased silver demand did push the silver price up to around $30 and no doubt it is likely some new Reddit silver investors did impact that move higher.
On January 29th, a sub group of Reddit investors focused solely on silver (r/Wallstreetsilver) was created. Since this blog was also created due to a surge in silver interest, it is only natural to keep an eye on this group of silver investors to see what impact they may have on the market. As of the date of this article, the group has expanded to over 34,000 members and growing daily. You may ask, how much silver are these new investors actually buying and will it impact the silver market?
The quick answer is quite a lot of physical silver buying is taking place. Below are links to example posts in the r/Wallstreetsilver forum where people are reporting in some detail just how much silver they are buying. There is no doubt that they are creating pressure on the retail market availability of silver products. The key will be to see if the group continues to grow and if the buying power is sustained over the long term.
The silver market is actually pretty tiny compared to other global markets like stocks, bonds, and even gold (2019 chart). So it won’t take as much new sustained buying power to make a real impact in the silver market. If this movement continues to grow, just a million new silver investors around the world could make a big difference. Five million would make a huge difference with just a relatively small investment per investor (say 25-50 ounces a year each for example).
Take a look at the list of links below to get a feel for the silver buying being reported just by this one Reddit group @ r/Wallstreetsilver:
The examples above are a small sample taken from postings in just the last few hours. After following this forum for a couple of weeks now, there are hundreds more similar examples. If you scroll down and read the comments you will find hundreds more people reporting similar buys in the comments sections.
- 2,500 ounce buyer from Korea
- 1000 ounces+ 9000 shares of PSLV
- 5 KG’s buyer from Switzerland
- 75 ounce buyer from Germany
- 700 ounces reported from a “newbie” silver buyer
- 100 KG’s reported from Thailand
- 1000 ounce goal achieved
- New buyer reports 44 ounces
- 101 Silver eagles from Germany
- “Another 52 ounces”
- Many buying shares of PSLV etf (PSLV bought more than 5 million ounces in Feb)
- 276 ounces reported
- “Fair start for a workin guy”
- 300 ounces to start – more soon
- 300 more ounces – hits 1,000 ounce target
- 130 ounces – mixed variety
- 1300 ounces – “Doing my part”
- Not sure how many ounces – but a whole lot
- Might as well add a video – 300 ounces
- Some frustrated by lack of available silver
I think it is fair to estimate that this group may well have bought 5 to 10 million ounces of silver in February alone if you combine the purchase of physical metal in hand along with buying of shares of PSLV which also buys physical ounces of silver to back all the shares of the fund that are issued. Annualized that could add 50 to 100 million ounces of new investment demand for physical silver. Again, think about the impact of one million or more new buyers around the world if this group (and others like it) continues to grow. I’ll let you do the math. But without question, that kind of added new sustained demand for physical silver will impact the silver market if it happens.