Editor's Note: After reviewing the ups and downs of the crypto industry in 2025, let's broaden our perspective: the pulse of the global financial markets often mirrors and is inextricably linked to the logic of the crypto space. This article focuses on 11 major trades of the year, from cross-market trends to policy-driven asset fluctuations. The market rules and risk revelations hidden within are also worth referencing for crypto practitioners, helping to see the full picture of the annual financial landscape together.

This was another year filled with "high-conviction bets" and "rapid reversals".

From bond trading desks in Tokyo and credit committees in New York to forex traders in Istanbul, the markets delivered both windfalls and wild volatility. Gold prices hit record highs, the stock of a steady mortgage giant swung wildly like a 'Meme stock' (stocks driven by social media hype), and a textbook arbitrage trade collapsed in an instant.

Investors placed big bets around political changes, bloated balance sheets, and fragile market narratives, driving significant stock market rallies and crowded yield trades, while crypto strategies often relied on leverage and expectations, lacking other solid support. After Donald Trump returned to the White House, global financial markets first slumped heavily, then recovered; European defense stocks were ignited; speculators stirred up wave after wave of market mania. Some positions yielded astonishing returns, but when market momentum reversed, funding dried up, or leverage backfired, others suffered heavy losses.

As the year-end approaches, Bloomberg focuses on the most notable bets of 2025—including successes, failures, and the positions that defined the era. These trades leave investors grappling with a series of 'old problems' as they prepare for 2026: unstable companies, excessive valuations, and those 'once-effective, eventually-failed' trend-following trades.

Cryptocurrency: The Short-Lived Rally of Trump-Linked Assets

For the cryptocurrency sector, "buying up all assets linked to the Trump brand" seemed like a highly attractive momentum bet. During the presidential campaign and after taking office, Trump went "all-in" on digital assets (as reported by Bloomberg Terminal), pushing for comprehensive reforms and placing industry allies in key agencies. His family also joined in, endorsing various tokens and crypto companies, which traders saw as "political booster fuel."

This "Trump crypto asset matrix" quickly took shape: hours before the inauguration, Trump launched a Meme coin promoted on social media; First Lady Melania Trump subsequently launched her own personal token; later in the year, Trump-family-linked World Liberty Financial made its WLFI token available for trading, allowing retail investors to buy. A series of "Trump-related" trades emerged—Eric Trump co-founded American Bitcoin, a publicly traded cryptocurrency miner that went public via a merger in September.

Each asset launch triggered a wave of buying, but each rally was short-lived. As of December 23, Trump's Meme coin performed dismally, down over 80% from its January high; according to crypto data platform CoinGecko, Melania's Meme coin fell nearly 99%; American Bitcoin's stock price fell about 80% from its September peak.

Politics provided the thrust for these trades, but the laws of speculation ultimately pulled them back to earth. Even with "supporters" in the White House, these assets couldn't escape the core cycle of cryptocurrency: price rise → leverage influx → liquidity drain. Bitcoin, a bellwether for the industry, is likely to post an annual loss after falling from its October peak. For Trump-linked assets, politics can bring short-term heat but cannot provide long-term protection.

—Olga Kharif (Reporter)

AI Trade: The Next 'Big Short'?

This trade was exposed in a routine disclosure filing, but its impact was anything but routine. On November 3, Scion Asset Management disclosed holdings of protective put options on Nvidia and Palantir Technologies—two companies at the core of the market-driving 'AI stocks' rally of the past three years. Although Scion is not a large hedge fund, its manager, Michael Burry, drew intense scrutiny to the filing: Burry gained fame for 'foreseeing the 2008 subprime crisis' in the book and film "The Big Short," becoming a recognized market 'prophet.'

The strike prices of the options were staggering: Nvidia's strike price was 47% below the closing price at the time of disclosure, and Palantir's was 76% lower. But the mystery remains: limited disclosure requirements make it impossible to know if these put options (contracts giving the holder the right to sell a stock at a set price before a certain date) were part of a more complex trade; and the filing only reflects Scion's holdings as of September 30, leaving open the possibility Burry reduced or closed the positions later.

However, market skepticism about the 'high valuations and high spending of AI giants' had been piling up like 'dry kindling.' Burry's disclosure was like a match thrown onto that kindling.

Burry's Bearish Bets on Nvidia and Palantir

The investor famous for "The Big Short" disclosed put option holdings in a 13F filing:

Following the news, Nvidia, the world's most valuable stock, plummeted, Palantir also fell, and the Nasdaq index saw a slight pullback, though these assets subsequently recovered their losses.

It's impossible to know exactly how much Burry profited, but he left a clue on social platform X: stating he bought Palantir puts for $1.84, and those options surged 101% in less than three weeks. This disclosure exposed the underlying doubts in a market dominated by 'a few AI stocks, massive passive inflows, and low volatility.' Whether this trade ultimately proves 'prescient' or 'premature,' it confirms a pattern: once market conviction wavers, even the strongest market narrative can reverse quickly.

—Michael P. Regan (Reporter)

Defense Stocks: An Outbreak in the New World Order

Shifts in the geopolitical landscape triggered an explosion in 'European defense stocks,' a sector once considered 'toxic' by asset managers. Trump's plans to reduce funding support for Ukraine's military prompted European governments to embark on a 'defense spending spree,' sending shares of regional defense companies soaring: as of December 23, Germany's Rheinmetall AG was up about 150% year-to-date, and Italy's Leonardo SpA gained over 90% in the same period.

Previously, many fund managers avoided the defense industry due to its 'controversial' nature under 'Environmental, Social, and Governance' (ESG) investing principles; now, they are changing their stance, with some funds even redefining their investment scope.

European Defense Stocks Surged in 2025

The region's military stocks rose more than during the initial phase of the Russia-Ukraine conflict:

"It wasn't until early this year that we reintroduced defense assets into our ESG funds," said Pierre Alexis Dumont, Chief Investment Officer at Sycomore Asset Management. "The market paradigm has shifted, and when paradigms shift, we have both a responsibility and values to defend—so we now focus on assets related to 'defensive weapons.'"

Stocks with any connection to defense were frantically bought up, from goggle manufacturers and chemical producers to a printing company. As of December 23, the Bloomberg European Defense Index was up over 70% for the year. The frenzy spread to credit markets: even companies 'indirectly related' to defense attracted a crowd of potential lenders; banks even launched 'European defense bonds'—modeled on green bonds but dedicated to entities like weapons manufacturers. This change marks a repositioning of 'defense' from a 'reputational liability' to a 'public good,' and confirms a truth: when geopolitics shift, capital moves faster than ideology.

—Isolde MacDonogh (Reporter)

Devaluation Trade: Fact or Fiction?

The heavy debt burdens of major economies like the US, France, and Japan, coupled with a 'lack of political will to address the debt,' led some investors in 2025 to flock to 'anti-devaluation assets' like gold and cryptocurrencies, while cooling on government bonds and the US dollar. This strategy was labeled the bearish 'devaluation trade,' inspired by history: rulers like Emperor Nero of ancient Rome dealt with fiscal pressure by 'debasing their currency.'

In October, this narrative peaked: worries about the US fiscal outlook, combined with the 'longest government shutdown in history,' led investors to seek havens beyond the dollar. That month, gold and bitcoin simultaneously hit record highs—a rare synchronized moment for these two assets often seen as competitors.

Gold Record

The 'devaluation trade' helped the precious metal hit new highs:

As a 'story,' 'devaluation' offered a clear explanation for a chaotic macro environment; but as a 'trading strategy,' its actual effectiveness was far more complex. Subsequently, cryptocurrencies broadly pulled back, with bitcoin falling sharply; the dollar stabilized; US Treasuries, far from collapsing, were on track for their best year since 2020—a reminder that fears of 'fiscal deterioration' can coexist with demand for safe assets, especially during periods of slowing growth and peak policy rates.

Other asset price movements were mixed: the volatility in metals like copper, aluminum, and even silver was half driven by 'fears of currency devaluation' and half by Trump's tariff policies and macro forces, blurring the line between 'inflation hedge' and 'traditional supply shock.' Meanwhile, gold continued its strong run, repeatedly刷新ing历史新高. In this arena, the 'devaluation trade' still worked—but it was no longer a 'wholesale rejection of fiat currency,' more a precise bet on 'rates, policy, and safe-haven demand.'

—Richard Henderson (Reporter)

Korean Stocks: A 'K-Pop' Style Surge

When it comes to plot twists and excitement, the performance of the South Korean stock market this year was enough to make K-dramas 'step aside.' Driven by President Lee Jae-myung's policies to 'boost the capital markets,' the benchmark Kospi index had gained over 70% in 2025 as of December 22, moving towards Lee's stated '5000 point target' and easily ranking among the top performers of major global indices.

It's not common for political leaders to publicly set a 'stock index level' as a target, and Lee Jae-myung's initial 'Kospi 5000' plan didn't get much attention. Now, more Wall Street banks, including JPMorgan Chase and Citigroup, believe this target could be achieved in 2026—partly thanks to the global AI boom, with Korean stocks seeing increased demand as 'core Asian AI trading targets.'

Korean Stock Market Rebounds

The benchmark index soared:

In this 'world-leading' rally, there was a notable 'absentee': South Korean retail investors. Although Lee often emphasizes to voters that 'he was a retail investor before entering politics,' his reform agenda hasn't yet convinced domestic investors that 'stocks are worth holding long-term.' Even as foreign funds poured into Korean stocks, local retail investors were 'net sellers': they invested a record $33 billion into US stocks and chased riskier investments like cryptocurrencies and overseas leveraged ETFs.

This phenomenon had a side effect: pressure on the Korean Won. Capital outflows weakened the won, a reminder that even a 'blockbuster stock rally' can掩盖lingering domestic investor doubts.

—Youkyung Lee (Reporter)

Bitcoin Duel: Chanos vs. Saylor

Every story has two sides, and the arbitrage battle between short-seller Jim Chanos and 'bitcoin hoarder' Michael Saylor's MicroStrategy was not just about two highly charismatic figures, but also evolved into a 'referendum on capitalism in the crypto age.'

Early in 2025, as bitcoin prices soared, MicroStrategy's stock surged in tandem, and Chanos saw an opportunity: MicroStrategy's stock price was trading at an excessive premium relative to its 'bitcoin holdings,' which the legendary investor deemed 'unsustainable.' Therefore, he decided to 'short MicroStrategy and go long bitcoin,' publicly announcing this strategy in May (when the premium was still high).

Chanos and Saylor then engaged in a public war of words. In June, Saylor said in a Bloomberg Television interview: "I don't think Chanos understands our business model at all"; Chanos fired back on platform X, calling Saylor's explanation 'complete and utter financial nonsense.'

In July, MicroStrategy's stock hit a record, up 57% year-to-date; but as the number of 'digital asset treasury companies' proliferated and crypto token prices retreated from highs, MicroStrategy and its 'imitators' saw their shares fall, and MicroStrategy's premium to bitcoin shrunk—Chanos's bet began to pay off.

MicroStrategy Underperforms Bitcoin This Year

As MicroStrategy's premium vanished, Chanos's short trade paid off:

From the time Chanos publicly announced his 'short on MicroStrategy' until he declared he 'closed the position' on November 7, MicroStrategy's stock fell 42%. Beyond the profit and loss itself, this case revealed the 'recurring cycle of boom and bust' in cryptocurrency: balance sheets膨胀on 'confidence,' and confidence relies on 'rising prices' and 'financial engineering.' This model works until 'belief wavers'—at which point the 'premium' is no longer an advantage but a problem.

—Monique Mulima (Reporter)

Japanese Government Bonds: From 'Widowmaker' to 'Rainmaker'

For decades, one bet has repeatedly tripped up macro investors—the 'widowmaker' trade of shorting Japanese Government Bonds (JGBs). The logic seemed simple: Japan carries a massive public debt, so interest rates 'must rise eventually' to attract enough buyers; investors accordingly 'borrowed and sold bonds,' hoping to profit when 'rates rose and bond prices fell.' However, for years, the Bank of Japan's easy monetary policy kept borrowing costs low, costing short-sellers dearly—until 2025, when the situation finally reversed.

This year, the 'widowmaker' turned into a 'rainmaker': yields on benchmark Japanese government bonds surged across the board, making the $7.4 trillion JGB market a 'short-seller's paradise.' The triggers were varied: BOJ interest rate hikes, and Prime Minister Takaichi Sanae's 'largest post-pandemic spending plan.' The benchmark 10-year JGB yield broke above 2%, a multi-decade high; the 30-year bond yield rose over 1 percentage point, setting a new record. As of December 23, the Bloomberg Japan Treasury Return Index was down over 6% for the year, becoming the worst-performing major bond market globally.

Japanese Bond Market Plunges This Year

The Bloomberg Japan Treasury Index was the worst-performing major bond index globally:

Fund managers at Schroders, Jupiter Asset Management, RBC BlueBay Asset Management, among others, publicly discussed 'shorting JGBs in some form' this year; investors and strategists believe there is still room for this trade as benchmark policy rates rise. Additionally, the BOJ is reducing its bond purchases, further pushing yields higher; and with the Japanese government's debt-to-GDP ratio 'leading by a wide margin' among developed nations, bearish sentiment towards JGBs 'could persist.'

—Cormac Mullen (Reporter)

Credit 'In-Fighting': The Rewards of 'Hardball Tactics'

The richest credit returns in 2025 didn't come from 'betting on corporate recovery,' but from 'pushing back against fellow investors.' This model, called 'creditor-on-creditor violence,' paid off handsomely for firms like Pimco and King Street Capital Management—which orchestrated a precise 'play' around Envision Healthcare, a healthcare company owned by KKR.

Post-pandemic, hospital staffing provider Envision was struggling and desperately needed loans from new investors. But issuing new debt required 'pledging already-pledged assets': a majority of creditors联合opposed this plan, but Pimco, King Street, and Partners Group 'defected' in support—their support allowed a proposal to pass that released collateral (equity in Envision's valuable outpatient surgery business, Amsurg) from old creditors to secure the new debt.

These institutions then became 'holders of bonds secured by Amsurg' and ultimately converted the bonds into Amsurg equity. This year, Amsurg was sold to healthcare group Ascension Health for $4 billion. It's estimated these institutions that 'betrayed their peers' achieved returns of around 90%—confirming the profit potential of 'credit in-fighting.'

This case reveals the rules of today's credit market: loose documentation terms, dispersed creditors, 'cooperation' is not necessary; 'being right' is often not enough, 'avoiding being outmaneuvered by peers' is the bigger risk.

—Eliza Ronalds-Hannon (Reporter)

Fannie Mae and Freddie Mac: Revenge of the 'Toxic Twins'

Since the financial crisis, mortgage giants Fannie Mae and Freddie Mac have been under US government conservatorship, and 'when and how they might be released' has long been a focus of market speculation. Hedge fund manager Bill Ackman and other 'proponents' held long-term positions, hoping a 'privatization plan' would bring huge profits, but as the situation remained unchanged, the companies' stocks languished for years in the pink sheets (over-the-counter market).

Trump's re-election changed this: optimistic market expectations that the 'new administration would push for their release' instantly surrounded Fannie and Freddie stocks with 'Meme-stock-like enthusiasm.' In 2025, the heat intensified further: from the start of the year to their September peak, the companies' shares skyrocketed 367% (with an intraday gain of 388%), becoming one of the year's brightest winners.

Fannie and Freddie Shares Soar on Privatization Hopes

Growing belief that the companies will be released from government control.

In August, news that the 'government was considering an IPO for the companies' pushed the frenzy to its peak—the market anticipated an IPO valuation potentially exceeding $500 billion, planning to raise about $30 billion by selling a 5%-15% stake. Although skepticism about the specific timing and whether the IPO would actually happen caused stock price volatility from the September peak, most investors remained confident in this prospect.

In November, Ackman published a proposal submitted to the White House, suggesting pushing for Fannie and Freddie to be relisted on the New York Stock Exchange, while writing down the US Treasury's preferred equity stakes in both enterprises and exercising government options to acquire nearly 80% of the common stock. Even Michael Burry joined this camp: he announced a bullish stance on both companies in early December, stating in a 6000-word blog post that these two enterprises, which once needed a government rescue to avoid bankruptcy, might no longer be the 'toxic twins.'

—Felice Maranz (Reporter)

Turkish Carry Trade: A Complete Collapse

After a stellar performance in 2024, the Turkish carry trade became a 'consensus pick' for emerging market investors. With local bond yields above 40% and the central bank承诺maintaining a stable dollar-pegged exchange rate, traders piled in—borrowing cheaply overseas to buy high-yielding Turkish assets. This trade attracted billions from firms like Deutsche Bank, Millennium Partners, and Gramercy Capital, some of whose personnel were actually in Turkey on March 19th, the day the trade collapsed completely within minutes.

The trigger happened that morning: Turkish police raided the home of a popular opposition mayor in Istanbul and detained him. This event sparked protests and疯狂selling of the Turkish lira, which the central bank was powerless to stop. Kit Juckes, FX strategist at Société Générale in Paris, said at the time: "Everyone was caught off guard, no one will dare return to this market anytime soon."

By the close that day, estimated capital outflows from lira-denominated assets were around $10 billion, and the market never truly recovered afterwards. As of December 23, the lira had depreciated about 17% against the dollar for the year, becoming one of the world's worst-performing currencies. This event also served as a warning to investors: high interest rates might offer returns to risk-takers, but they cannot withstand sudden political shocks.

—Kerim Karakaya (Reporter)

Bond Market: The 'Cockroach Alert' Sounds

The credit markets in 2025 weren't thrown into turmoil by one 'earth-shattering collapse,' but were unsettled by a series of 'small-scale crises'—exposing some disturbing hidden vulnerabilities. Companies once seen as 'routine borrowers'相继ran into trouble, and lending institutions suffered heavy losses as a result.

Saks Global paid interest only once before restructuring $2.2 billion in bonds, and the restructured bonds now trade below 60 cents on the dollar; New Fortress Energy's newly issued exchange bonds lost over 50% of their value within a year; Tricolor and First Brands filed for bankruptcy within weeks, wiping out billions in creditor value. In some cases, complex fraud was the root cause of the collapse; in others, the companies' initially optimistic performance expectations simply failed to materialize. But in all cases, investors were left with a question: why were massive credit bets placed on these companies with little evidence of their ability to repay debt?

Years of low default rates and easy monetary policy had eroded standards across the credit market—from lender protection covenants to basic underwriting processes. Lenders to First Brands and Tricolor didn't even discover违规行为like 'double-pledging assets' and 'commingling collateral for multiple loans.'

JPMorgan Chase was among these lenders. The bank's CEO, Jamie Dimon, warned the market in October with a vivid analogy to be wary of further risks: "When you see one cockroach, there are likely many more hiding in the dark." And this 'cockroach risk' might become one of the core themes for the 2026 market.

—Eliza Ronalds-Hannon (Reporter)