Shares of SIL experienced a dramatic sell-off on Friday, dropping over 30% in a single session—its steepest decline since March 1980. This collapse followed outsized leveraged positions built during January’s blistering rally, when SIL had surged by more than 45%. The sudden reversal was exacerbated by forced liquidations in margin accounts, as volatility spiked beyond 25%, leading to one of the most violent one-day moves on record for a silver exchange-traded product.

Analysts at BofA Securities estimate that, based purely on industrial demand and traditional supply-and-demand metrics, SIL’s fair value would be near 60 per ounce. Instead, the ETF traded as high as 120 at its January peak, buoyed by a meme-style frenzy among retail participants. On Thursday alone, more silver options linked to SIL changed hands than those on the Nasdaq 100, underscoring retail’s outsized role. With premiums on physical silver coins briefly surpassing 170 in some markets, sentiment has decoupled sharply from the underlying mine output and consumptive use.

Strategist forecasts for SIL remain polarized. In a bullish ‘blue sky’ scenario, continued retail inflows and a return of the gold-to-silver ratio toward historical norms could drive SIL toward 170 within two years. Conversely, if margin-driven liquidations persist and institutional investors stay sidelined, the ETF could revisit levels closer to fundamental-based valuations. With volatility expected to remain elevated, investors should brace for swings exceeding 20% in either direction and monitor leverage metrics as key indicators of potential recovery or additional downside.