Bloomberg Review: 11 Key Transactions to Understand the Global Financial Markets in 2025

Title: The 11 Big Trades of 2025: Bubbles, Cockroaches and a 367% Jump

Author: Bloomberg

Source:

Repost: Mars Finance

Editor’s Note: Looking back at the ups and downs of the crypto industry in 2025, it’s worth broadening our perspective: the pulse of the global financial markets often mirrors and is closely intertwined with the logic of the crypto space. This article focuses on 11 key trades of the year, from cross-market trends to policy-driven asset fluctuations, revealing market patterns and risk insights that are equally valuable for crypto practitioners. Let’s see the full picture of the year’s financial landscape.

This year is again filled with “high certainty bets” and “quick reversals.”

From bond trading desks in Tokyo, credit committees in New York, to forex traders in Istanbul, the markets have brought unexpected gains and caused intense volatility. Gold prices hit record highs, stable mortgage giants’ stocks swung wildly like “Meme stocks” (stocks driven by social media hype), and a textbook arbitrage trade suddenly collapsed.

Investors heavily bet on political shifts, inflated balance sheets, and fragile market narratives, driving stock markets sharply higher and yield trades crowded; meanwhile, crypto strategies relied heavily on leverage and expectations, lacking other solid supports. After Donald Trump returned to the White House, global financial markets first plunged then recovered; European defense stocks ignited a frenzy; speculators sparked one market craze after another. Some holdings yielded astonishing returns, but when market momentum reversed, funding dried up, or leverage turned negative, others suffered devastating losses.

As the year-end approaches, Bloomberg highlights some of the most notable bets of 2025—including successful cases, failures, and those that defined this era. These trades leave investors worried about a series of “old problems” as they prepare for 2026: unstable companies, overvaluations, and trend-following trades that “worked once but ultimately failed.”

Cryptocurrency: The Brief Frenzy of Trump-Related Assets

For the crypto sector, “buying all assets related to Trump’s brand” seemed like a highly momentum-driven bet. During the presidential campaign and after inauguration, Trump “went all-in” in digital assets (according to Bloomberg Terminal), pushing for comprehensive reforms and installing industry allies in key agencies. His family also entered the scene, endorsing various tokens and crypto firms, which traders saw as “political fuel.”

This “Trump crypto matrix” quickly took shape: hours before the inauguration, Trump launched a Meme coin and promoted it on social media; First Lady Melania Trump soon launched her own token; later that year, World Liberty Financial, linked to Trump’s family, opened trading of its WLFI token for retail investors. A series of “Trump-related” trades followed—Eric Trump co-founded American Bitcoin, a publicly traded crypto mining company that went public via M&A in September.

Each new asset sparked a rally, but each rally was fleeting. By December 23, Trump Meme coin performed poorly, down over 80% from January’s high; according to CoinGecko, Melania Meme coin fell nearly 99%; American Bitcoin’s stock price dropped about 80% from its September peak.

Politics provided the push, but the speculative cycle ultimately pulled these assets back to reality. Even with “supporters” in the White House, these assets could not escape the core crypto cycle: price rises → leverage inflates → liquidity dries up. Bitcoin, the industry bellwether, has likely recorded a yearly loss after its October peak. For Trump-related assets, politics can generate short-term hype but cannot offer long-term protection.

— Olga Kharif (Reporter)

AI Trading: The Next “Big Short”?

This trade was exposed in a routine disclosure document, but its impact was anything but routine. On November 3, Scion Asset Management disclosed holdings of Nvidia and Palantir Technologies protective put options—two “core AI stocks” that drove market gains over the past three years. Although Scion is not a large hedge fund, its manager Michael Burry drew widespread attention: Burry, famous for predicting the 2008 subprime crisis in “The Big Short” book and film, is recognized as a market “prophet.”

The strike prices of these options were shocking: Nvidia’s strike was 47% below its closing price at disclosure; Palantir’s was 76% lower. But the mystery remains: due to “limited disclosure requirements,” it’s unclear whether these puts are part of more complex trades; and the document only reflects Scion’s holdings as of September 30, leaving open the possibility that Burry reduced or liquidated positions afterward.

However, skepticism about “overvalued AI giants and high spending” had already piled up like “dry tinder.” Burry’s disclosure was like a match igniting that tinder.

Burry’s Short Bets on Nvidia and Palantir

Famous for “The Big Short,” Burry disclosed put options in a 13F filing:

Following the announcement, Nvidia, the world’s most valuable stock, plummeted, and Palantir also declined, with the Nasdaq slightly retreating; however, these assets later recovered.

It’s unclear how much Burry profited, but he left a clue on social platform X: he bought Palantir puts at $1.84, which surged 101% in less than three weeks. This disclosure exposed the underlying doubts in a market dominated by “few AI stocks, massive passive inflows, and low volatility.” Whether this trade proved “foresight” or “hasty,” it confirmed a rule: once market confidence wavers, even the strongest narratives can quickly reverse.

— Michael P. Regan (Reporter)

Defense Stocks: Explosive Growth Under a New World Order

Geopolitical shifts sparked a boom in “European defense stocks,” once considered “toxic assets” by asset managers. Trump’s plan to cut military aid to Ukraine prompted European governments to ramp up military spending, causing defense stocks to soar: as of December 23, Rheinmetall AG in Germany rose about 150% year-to-date; Leonardo SpA in Italy gained over 90%.

Previously, many fund managers avoided defense due to “ESG” concerns, citing controversy; now, attitudes have shifted, with some funds redefining their investment scope.

2025 European Defense Stocks Surge

The region’s defense stocks outperformed initial expectations after the Russia-Ukraine conflict:

“Until early this year, we only reintroduced defense assets into ESG funds,” said Pierre Alexis Dummon, CIO of Sycomore Asset Management. “The paradigm has shifted, and with that, we must take responsibility and defend our values—so now we focus on ‘defensive weapons’ related assets.”

From goggle manufacturers, chemical producers, to a printing company, stocks related to defense are in high demand. By December 23, Bloomberg’s European Defense Stock Index had gained over 70% this year. The trend extended into credit markets: even companies indirectly related to defense attracted many potential lenders; banks launched “European defense bonds”—modeled after green bonds but funding weapons manufacturers. This shift marks a redefinition of “defense” from “reputation liability” to “public good,” illustrating how capital flows often outpace ideological shifts during geopolitical realignments.

— Isolde MacDonogh (Reporter)

Devaluation Trades: Fact or Fiction?

Heavy debt burdens in major economies like the US, France, and Japan, coupled with a lack of political will to address debt, led some investors in 2025 to flock to “devaluation hedges” like gold and cryptocurrencies, cooling enthusiasm for government bonds and the dollar. This strategy was dubbed “devaluation trade” and inspired by history: Roman emperors like Nero once diluted currency to ease fiscal pressures.

In October, this narrative peaked: fears over US fiscal outlook, combined with the “longest government shutdown in history,” prompted investors to seek safe havens outside the dollar. Gold and Bitcoin hit record highs simultaneously—rare for these “rival” assets.

Gold Record

“Devaluation trades” helped push precious metals to new highs:

As a “story,” “devaluation” explained the chaotic macro environment; but as a “trading strategy,” its actual effectiveness was more complex. Subsequently, cryptocurrencies retreated, Bitcoin’s price fell sharply; the dollar stabilized; US Treasuries not only avoided collapse but may deliver their best performance since 2020—reminding us that fears of “fiscal deterioration” can coexist with “demand for safe assets,” especially during slowing growth and peak policy rates.

Prices of other assets diverged: metals like copper, aluminum, and silver fluctuated due to “currency devaluation fears” and macro forces like Trump’s tariffs, blurring the line between “inflation hedges” and “traditional supply shocks.” Meanwhile, gold continued to strengthen, hitting new records. In this realm, “devaluation trades” remain effective—but no longer as a total rejection of fiat currency, more as precise bets on “interest rates, policies, and risk aversion.”

— Richard Henderson (Reporter)

Korean Stock Market: “K-Pop Style” Surge

When it comes to plot twists and excitement, this year’s Korean stock market performance could give K-dramas a run for their money. Under President Lee Jae-myung’s policies to “boost the capital markets,” the Kospi index rose over 70% in 2025 as of December 22, heading toward Lee’s “5,000-point target,” and easily topping global leaderboards.

It’s rare for political leaders to openly set “index targets,” and Lee’s initial “Kospi 5000” plan drew little attention. Now, more Wall Street banks like JPMorgan and Citigroup believe this goal could be achieved by 2026—partly fueled by the global AI boom, as Korea’s stock market benefits from its role as an “Asian AI core trading target.”

Korea Stock Market Rebound

Korea’s benchmark index soared:

In this “global leading” rebound, one obvious “absentee” was domestic retail investors. Despite Lee often emphasizing “he was a retail investor before politics,” his reform agenda has yet to convince local investors that “stocks are worth holding long-term.” Even with heavy foreign inflows, retail investors continued to “net sell”: they invested a record $33 billion in US stocks and chased higher-risk assets like cryptocurrencies and leveraged ETFs.

This phenomenon had a side effect: the won came under pressure. Capital outflows weakened the currency, reminding outsiders that even a “spectacular stock rally” can mask “persistent domestic doubts.”

— Youkyung Lee (Reporter)

Bitcoin Duel: Chanos vs. Saylor

Every story has two sides, and the short-seller Jim Chanos versus “Bitcoin hoarder” Michael Saylor’s arbitrage game, under Strategy’s umbrella, involves two very distinctive personalities and has become a “referendum” on “capitalism in the crypto era.”

In early 2025, Bitcoin prices soared, and Strategy’s stock surged in tandem. Chanos saw an opportunity: Strategy’s stock was trading at a premium relative to its Bitcoin holdings, which he believed was “unsustainable.” So he decided to “short Strategy and go long Bitcoin,” revealing this strategy publicly in May (when the premium was still high).

Chanos and Saylor then engaged in a public feud. In June, Saylor told Bloomberg TV: “I think Chanos doesn’t understand our business model at all”; Chanos responded on X, calling Saylor’s explanation “complete financial nonsense.”

In July, Strategy hit a record, up 57% year-to-date; but as the number of “digital asset treasury” companies surged and crypto prices retreated from highs, Strategy and its “imitators” saw their stocks decline, and Strategy’s premium over Bitcoin shrank—Chanos’s bet started paying off.

Strategy’s 2025 Stock Performance Lagged Bitcoin

As Strategy’s premium disappeared, Chanos’s short position paid off:

From his public “short Strategy” in early November to his announcement of “liquidation” on November 7, Strategy’s stock fell 42%. Beyond the profit and loss, this case highlights the recurring “boom and bust” cycle in crypto: balance sheets inflated by “confidence,” which in turn depends on “rising prices” and “financial engineering.” This pattern works until “belief wavers”—then, “premium” becomes a liability, not an advantage.

— Monique Mulima (Reporter)

Japanese Government Bonds: From “Widow Maker” to “Rainmaker”

Over decades, a bet called the “widow maker”—shorting Japanese government bonds—repeatedly tripped up macro investors. The logic seemed simple: Japan’s massive public debt would push interest rates “eventually higher” to attract buyers; investors would “borrow and sell” bonds, expecting “rising rates and falling prices” to profit. But years of ultra-loose BOJ policies kept borrowing costs low, punishing short sellers—until 2025, when the situation finally reversed.

This year, the “widow maker” turned into a “rainmaker”: yields on Japanese bonds soared across the board, turning the ¥7.4 trillion market into a “shorts’ paradise.” Triggers included BOJ rate hikes and Prime Minister Suga’s “largest post-pandemic spending plan.” The 10-year yield broke 2%, hitting multi-decade highs; 30-year yields rose over 1 percentage point, setting records. By December 23, Bloomberg Japan Bond Return Index fell over 6% this year, making it the worst major bond market globally.

2025 Japan Bond Market Crash

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

Managers at Schroders, Jupiter Asset Management, Royal Bank of Canada Bayview Asset Management, and others publicly discussed “shorting Japanese bonds” in some form; investors and strategists believe there’s room for this trade as policy rates rise. Additionally, the BOJ is reducing bond purchases, further pushing yields higher; Japan’s debt-to-GDP ratio remains the highest among developed nations, and bearish sentiment on Japanese bonds may persist.

— Cormac Mullen (Reporter)

Credit “Internal Fight”: The Return of the “Hardball Strategy”

The most lucrative credit returns in 2025 didn’t come from “betting on corporate recovery,” but from “counterattacking fellow investors.” This “creditholder vs. creditholder” pattern allowed firms like Pacific Investment Management (Pimco) and King Street Capital Management to score big—by orchestrating a precise “game” around KKR’s healthcare company Envision Healthcare.

Post-pandemic, Envision, a hospital staffing firm, faced trouble and needed loans from new investors. But issuing new debt required “collateralizing pledged assets”: most creditors opposed, but Pimco, King Street, and Partners Group “defected” in support—allowing the “old creditors” to release collateral (such as Envision’s high-value outpatient surgery business, Amsurg) and back new debt.

These institutions then became “bondholders secured by Amsurg” and eventually converted bonds into Amsurg equity. This year, Amsurg was sold for $4 billion to Ascension Health. These “betrayers” reportedly earned about 90% returns—highlighting the profit potential of “credit internal fights.”

This case reveals the current rules of the credit market: loose contractual terms, dispersed creditors, and “cooperation” not being necessary; “correct judgment” often isn’t enough—“avoiding being overtaken by peers” is the bigger risk.

— Eliza Ronalds-Hannon (Reporter)

Fannie Mae and Freddie Mac: The “Toxic Twins” Revenge

Since the financial crisis, mortgage giants Fannie Mae and Freddie Mac have been under U.S. government control. When, how to exit this control, has long been a market focus. Hedge fund managers like Bill Ackman held long positions, hoping “privatization” would bring huge profits, but with no change in the situation, their stocks have languished in OTC markets for years.

Trump’s reelection changed the game: markets expected “the new administration will push these two companies to exit control,” and their stocks surged with “Meme stock” enthusiasm. In 2025, the hype intensified: from the start of the year to September’s peak, their stocks soared 367% (intraday up 388%), making them among the biggest winners of the year.

Fannie and Freddie’s stocks soared on privatization expectations

More and more believe these companies will break free from government control.

In August, news that “the government considers pushing IPOs for both” peaked the hype—market estimates valued the IPOs over $500 billion, planning to sell 5-15% for about $30 billion. Though skepticism remained about timing and feasibility, most investors still believed in the outlook.

In November, Ackman announced a proposal to relist Fannie and Freddie on the NYSE, reduce the U.S. Treasury’s preferred stock holdings, and exercise government options to acquire nearly 80% of common stock. Even Michael Burry joined this camp: in early December, he declared a bullish stance on both, writing a 6,000-word blog post suggesting these companies, once rescued by the government to avoid bankruptcy, might no longer be “toxic twins.”

— Felice Maranz (Reporter)

Turkey Carry Trade: Complete Collapse

After a stellar 2024, Turkey’s carry trade became a “consensus choice” among emerging market investors. At the time, Turkey’s local bonds yielded over 40%, and the central bank promised to maintain a stable dollar peg. Traders flooded in—borrowing cheaply abroad and buying high-yield Turkish assets. This trade attracted billions from institutions like Deutsche Bank, Millennium Partners, and Gramercy Capital, with some staff on the ground in Turkey on March 19. But on that very day, the trade collapsed within minutes.

The trigger was early morning: Turkish police raided the residence of Istanbul’s popular opposition mayor and detained him. The event sparked protests, the lira plunged, and the central bank was powerless to stop the currency’s free fall. Societe Generale’s FX strategist Kit Juxx said: “Everyone was caught off guard; no one will dare re-enter this market in the short term.”

By close, estimated capital outflows from lira-denominated assets reached about $10 billion, and the market never truly recovered. As of December 23, the lira depreciated about 17% against the dollar this year, making it one of the worst currencies globally. The event also served as a warning: high interest rates may reward risk-takers but cannot withstand sudden political shocks.

— Kerim Karakaya (Reporter)

Bond Market: The “Cockroach Alarm” Rings

In 2025, the credit market was not shaken by a single “catastrophic crash,” but by a series of “small crises” exposing unsettling vulnerabilities. Former “routine borrowers” faced repeated distress, causing lenders to suffer heavy losses.

Saks Global restructured a $2.2 billion bond after missing one interest payment, now trading below 60% of face value; New Fortress Energy’s new exchange bonds lost over 50% in a year; Tricolor and First Brands went bankrupt within weeks, wiping out billions in claims. In some cases, complex fraud was the root cause; in others, overly optimistic performance forecasts failed to materialize. Regardless, investors faced a key question: why did they make large-scale loans to these companies when there was little evidence they could repay?

Years of low default rates and loose monetary policy eroded lending standards—from covenants to underwriting processes. Even lenders to First Brands and Tricolor failed to detect violations like “re-mortgaging assets” or “commingling collateral.”

JPMorgan Chase was among these lenders. CEO Jamie Dimon warned in October: “When you see a cockroach, there are probably more hiding in the dark.” This “cockroach risk” may become a core theme for 2026.