Tokenized silver is designed to track the price of physical silver (XAG), typically with 1 token ≈ 1 troy ounce of silver. In theory, pricing should closely follow spot silver. In reality, liquidity, trust, and market structure create noticeable deviations.
Current Pricing Snapshot (Early 2026)
Spot silver (physical):
• Trading around $110–120 / oz, following a sharp multi-year breakout
Major tokenized silver instruments:
• $XAG (Silver Token): trading roughly $95–115
• SLVR (Silver rStock): around $95–100
• Kinesis Silver (KAG): closely tracks spot, with smaller spreads but limited retail access
📌 Key observation:
Tokenized silver is often trading at a discount to spot silver, not a premium.
Why Tokenized Silver Trades Below Spot
Liquidity Friction
Most silver tokens have:
• Low daily volume
• Thin order books
• Limited CEX listings
This creates pricing inefficiency, especially during fast spot price expansions.
Redemption & Trust Premium
Not all tokenized silver offers:
• Easy physical redemption
• Transparent vault audits
• Jurisdictional clarity
Markets price this risk in.
Less trust = wider discount.
Demand Is Still Speculative, Not Structural
Unlike tokenized dollars:
• Tokenized silver is not widely used as collateral
• Not deeply integrated into DeFi
• Mostly held for price exposure, not utility
That caps upside during hype phases.
Volatility Comparison
Over the last 12 months:
• Spot silver volatility: extremely high (macro + safe-haven demand)
• Tokenized silver volatility: lower, but with delayed reactions
👉 Token prices often lag spot moves, then adjust in steps rather than continuously.
What the Market Is Signaling
Tokenized silver pricing suggests:
• Traders expect mean reversion or consolidation after the recent silver surge
• Capital prefers direct exposure (ETFs, futures, physical) during high-momentum phases
• On-chain silver is still treated as a niche RWA, not a core monetary asset
Big Picture Takeaway
Tokenized silver is not mispriced — it’s risk-adjusted.
Until:
• Liquidity deepens
• Redemption trust improves
• DeFi integrations expand
…tokenized silver will likely continue trading below spot, even during bullish silver cycles.
The gap isn’t a bug. It’s the market pricing reality.