China’s ‘metal war’ and inside Bitcoin’s big test for Q1 2026

The market still can’t seem to catch its breath.In the first half of 2025, the tariff war dominated headlines. The buildup to the “Liberation Day” FUD triggered a sharp Q1 sell-off, knocking 18% off the TOTAL crypto market cap. That’s a staggering $500 billion in outflows.As we moved into the second half, Q4 kicked off with a similar FUD. In fact, Bitcoin [BTC] is down 25% so far, following Trump’s tariff wars in early October. Now, it looks like another war is already setting the tone for Q1 2026.Silver rally heats up, adding pressure on Bitcoin marketsThe market’s recent momentum has been pretty one-sided.Backing this up, legacy assets are showing the shift clearly. Gold, silver, and platinum are all moving up together, hitting new highs. Take silver, for example – It is up a staggering 70% in Q4, now at an all-time high of $79/oz.No doubt, this surge has pulled capital away from Bitcoin. However, it’s not just a random divergence. The market looks like it’s entering a full-blown “metal war,” with China once again taking center stage.Source: TradingView (SILVER/USDT)On 01 January, China’s export restrictions on silver will kick in.Why it matters – With China controlling 60-70% of the global supply, this move could shake up the market, creating a classic supply-demand imbalance. Especially after silver demand in 2025 surged to 1.24 billion ounces.In this context, the recent jump in silver prices starts to make sense. However, is this just the beginning? If so, where does that leave Bitcoin, which is already seeing a lack of institutional interest despite its 25% Q4 “dip?”Institutions favor Silver, leaving BTC in the dustIt looks like U.S investors are front-running this setup.On-chain, Bitcoin’s Coinbase Premium Index (CPI) continues to sink deeper into the red, signaling a clear lack of buying from U.S-based investors. Meanwhile, an outflow-heavy ETF has been showing a similar trend too.On the contrary, institutional demand for silver has been surging. Analysts believe that 50–60% of all silver supply is now held by institutional heavyweights. In this setup, China’s ban is only giving buyers more incentives to stockpile.Source: TradingView (HL/USD)Hecla Mining [HL], the largest U.S. silver miner, is exhibiting this trend too.Technically, HL shares are on a bullish roll, up 170% over the past two quarters. Q4 alone has added 66%+, pushing its market cap from $320 billion to $1.2 trillion at press time. That’s a clear sign of strong demand.Hence, with China’s ban tightening supply, metals are taking the lead, and miners like Hecla are riding the rally. On the contrary, Bitcoin remains stuck, with this “metal war” setting a bearish tone for BTC heading into 2026.Final ThoughtsInstitutional demand is pouring into silver, with 50–60% of supply held by heavyweights. HL shares are up 170% over two quarters as China’s export control is expected to tighten supply.