Cavendish had never won an Olympic medal before this event and will be happy with his performance after only finishing 13 points off gold medalist Elia Viviani.
Lasse Norman Hansen completed the podium by winning bronze in the event he was expected to do better in.
Cavendish has a mixed first day
The event began on Sunday with the scratch race, which Cavendish only managing to finish sixth. In the second event though, Cavendish got on much better setting the second best time in the individual pursuit to sit in the bronze medal position.
The third event was the Elimination race and it was a costly one for the British rider as he was pulled out of the race by the commissaries after he was judged to have undertaken off the track to stay in contention.
In the fourth event which was the time trial, Cavendish could only sixth fastest which kept him third overall.
Cavendish crashes in the final race but holds on for a silver medal
The GB rider, therefore, went into the final two events on Monday in the bronze medal position knowing that he needed to improve in the final two events to have a chance of winning a higher medal.
In the points race which was the final event that took place, it was to turn out to be dramatic as Cavendish was involved in a crash midway through the race.
The crash seemed to be the Brits' own making as he sent South Korean rider Park Sanghoon off his bike with 109 laps to go with two further riders falling as well.
Cavendish though didn't let the crash effect him as he kept going but the race had to be neutralised with 99 laps to go to allow Park to be carried away on a stretcher.
The crash left many saying that the British rider should be punished for causing the crash but it actually hindered his chances of winning the race rather than boosted them.
The rest at the midway stage meant that all of the other riders got a crucial break, which meant even though one of Cavendish's greatest strengths - his road endurance - meant little as his competitors had fresher legs to finish the race.
Cavendish only 13 points off a gold medal
At the end of the event, Viviano had 207 points which was 13 clear of Cavendish on 194 while Hansen finished with 192. World Champion Fernando Gaviria of Colombia finished in fourth position on 181 points, which was a shock for the rider who would have expected to be in the medals.