Silver Market Crash Triggers Record Liquidations After Fed News

Financial markets were thrown into turmoil on Friday, January 30, 2026, as silver prices experienced their steepest single-day decline in recent memory, triggering a cascade of liquidations and roiling investors worldwide. The dramatic drop followed President Donald Trump’s announcement that he would nominate economist Kevin Warsh as the next chair of the Federal Reserve, a move that reverberated across asset classes and set off a chain reaction in precious metals and equities alike.

According to data compiled by ChainCatcher News and monitoring services HyperInsight and CoinGlass, the total liquidation volume of silver-mapped contracts across the network reached an eye-watering $70.52 million in just four hours—outpacing every other asset class for the day. An astonishing 99% of these liquidations were long positions, underscoring just how quickly bullish bets soured as prices collapsed. The majority of this turbulence was centered on the Hyperliquid platform, where one so-called "whale"—an investor with a massive XYZ:SILVER long position—was liquidated for $18.13 million in a matter of minutes. Nine other large liquidations, each exceeding $1 million, occurred on Hyperliquid during the same window.

The carnage wasn’t confined to the digital realm. As reported by CNBC and other financial outlets, spot silver prices plunged by more than 37% before 5 p.m. ET, settling around $84.63 a troy ounce. The iShares Silver Trust (SLV), a favorite among retail traders, nosedived more than 28%—its worst day on record. Spot gold also tumbled, though less dramatically, falling about 11% to $4,864 a troy ounce. These moves abruptly ended a year-long rally that had seen silver futures soar 142% and gold climb 67%, fueled by a rush into so-called "safe haven" assets amid global economic uncertainty.

What triggered such a swift reversal? Analysts pointed to a confluence of factors, with the announcement of Kevin Warsh’s nomination as Fed chair at the center. Warsh, a former Fed governor known for his hawkish stance on monetary policy, has historically opposed aggressive rate cuts. However, in recent months, he has signaled greater openness to lowering rates, aligning more closely with President Trump’s preference for looser monetary policy. This pivot appeared to reassure markets about the Fed’s future direction. "Kevin Warsh’s nomination for Fed Chair is exactly what markets were hoping for, as he’s a steady hand, well known in market circles and is expected to maintain the independence of the central bank, which is critical for markets," said Richard Saperstein, chief investment officer of Treasury Partners, in comments reported by CNBC.

The impact of Warsh’s nomination was felt immediately in currency markets, where the U.S. dollar staged a sharp rally after a recent slump. The dollar’s strength, combined with rising U.S. Treasury yields, signaled that investors were growing more confident in the stability and direction of U.S. monetary policy. This newfound confidence led many to unwind positions in precious metals, which had been bid up as insurance against uncertainty. As one strategist told CNBC, "This has been the hottest asset for day traders and other short-term traders recently. There has been some leverage built up in silver. With the huge decline today, the margin calls went out."

The forced selling was especially acute among retail investors and day traders, many of whom had piled into silver trades during its meteoric rise. According to Matt Maley, chief market strategist at Miller Tabak, the scale of the decline and the speed of margin calls suggested that fundamentals had not changed so much as sentiment: "Such a move can be indicative of forced selling, given that fundamentals rarely change on a trade so quickly." The speculative bubble in silver, which had inflated rapidly over the past year, appeared to burst all at once.

Meanwhile, the broader stock market was hardly immune to the day’s volatility. The S&P 500 slipped 0.43% to 6,939.03, marking its third straight down day, while the Dow Jones Industrial Average lost 179 points (0.36%) to settle at 48,892.47. The tech-heavy Nasdaq Composite lagged even further, falling 0.94% to 23,461.82. All three indexes had been down more than 1% at their session lows, reflecting the breadth of the sell-off. Yet, despite the day’s losses, the S&P 500 and Dow managed to eke out gains of 1.4% and 1.7%, respectively, for the month of January, while the Nasdaq posted a 1% gain. The small-cap Russell 20009 index outperformed, jumping over 5% for the month.

Amid the turbulence, individual stocks saw wild swings. Apple’s shares oscillated between gains and losses despite beating fiscal first-quarter expectations and reporting a surge in iPhone sales. Microsoft, on the other hand, suffered a 10% drop—its worst day since 2020—shedding over $350 billion in market capitalization. KLA Corp also took a hit, plunging more than 15% after issuing a downbeat growth forecast. Yet it wasn’t all doom and gloom: Verizon shares soared nearly 12%, their best day since 2008, after the telecommunications giant beat analyst expectations and offered a bullish full-year outlook.

For many market participants, the day’s events were a stark reminder of the risks that come with leverage and speculative trading, especially in volatile asset classes like precious metals. The rapid unwinding of long positions in silver, triggered by a sudden price drop and exacerbated by margin calls, demonstrated just how quickly fortunes can change. As ChainCatcher News reported, the total liquidation volume in silver contracts reached levels rarely seen, with most of the pain borne by those betting on further gains.

The broader takeaway for investors? Even assets deemed "safe" can become treacherous when market dynamics shift and leverage is involved. The interplay between political decisions—such as the nomination of a new Fed chair—and market psychology can set off chain reactions that ripple across asset classes. As the dust settles, all eyes will be on Kevin Warsh and the Federal Reserve to see whether the new leadership can steer markets toward calm—or whether more turbulence lies ahead.

In the end, Friday’s silver crash will be remembered not just for the billions wiped out in a matter of hours, but for the way it exposed the fragility lurking beneath seemingly unstoppable rallies. The lessons learned may linger long after the headlines fade.