Bloomberg Checklist: 11 Key Trades to Understand the 2025 Global Financial Market

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

Original Source: Bloomberg

Original Translation: Saoirse, Foresight News

Editor's Note: Looking beyond the ups and downs of the cryptocurrency industry in 2025, let's broaden our horizons: the pulse of the global financial markets often mirrors and intertwines with the logic of the crypto space. This article focuses on the 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 professionals, providing a comprehensive view of the annual financial landscape.

It was another year filled with "high conviction bets" and "swift reversals."

From the bond trading floor in Tokyo, to the credit committee in New York, to forex traders in Istanbul, the markets brought both unexpected windfalls and violent swings. The price of gold hit a historic high, solid mortgage giants' stock prices oscillated wildly like "meme stocks" (stocks driven by social media hype), and a textbook-level arbitrage trade collapsed in an instant.

Investors placed large bets around political shifts, ballooning balance sheets, and fragile market narratives, driving significant stock market gains, yield curve inversions, while cryptocurrency strategies relied heavily on leverage and speculation, lacking other solid foundations. After Donald Trump returned to the White House, global financial markets first plummeted, then rebounded; European defense stocks caught fire; speculators sparked one market frenzy after another. Some positions reaped tremendous returns, but when the market sentiment reversed, funding channels dried up, or leverage had a negative impact, other positions suffered devastating losses.

As the year draws to a close, Bloomberg focuses on the most notable types of bets in 2025—including success stories, failures, and those holdings that defined the era. These trades leave investors apprehensive about a series of "old problems" as they prepare for 2026: unstable companies, overvalued assets, and those "once effective, eventually failed" trend-chasing trades.

Cryptocurrency: The Brief Trump-Related Asset Frenzy

For the cryptocurrency space, a "massive buy-in of all assets related to the Trump brand" seemed like an incredibly attractive momentum bet. During his presidential campaign and post-inauguration, Trump "went all-in" in the digital asset realm (according to Bloomberg Terminal reports), pushing for comprehensive reforms and embedding industry allies in several key regulatory bodies. His family also joined the fray, endorsing various tokens and cryptocurrency companies, with traders viewing these as "political rocket fuel."

This "Trump-Linked Cryptocurrency Matrix" quickly took shape: hours before the inauguration ceremony, Trump launched a meme coin and promoted it on social media; First Lady Melania Trump then released her own personal token; later that year, World Liberty Financial, associated with the Trump family, made its WLFI token available for trading, for retail investors to purchase. A series of "Trump-adjacent" transactions emerged—Eric Trump co-founded American Bitcoin, a publicly traded cryptocurrency mining company that went public through acquisition in September.

In a shop in Hong Kong, a cartoon image of Donald Trump, holding a cryptocurrency token, with the White House in the background, commemorating his inauguration. Photographer: Paul Yeung/Bloomberg

Each asset's launch triggered a surge, but each surge was short-lived. As of December 23, the Trump meme coin performed poorly, plummeting over 80% from its January high; according to the cryptocurrency data platform CoinGecko, Melania meme coin saw a drop of nearly 99%; American Bitcoin's stock price dropped approximately 80% from its September peak.

Politics propelled these transactions, but speculative rules ultimately brought them back to square one. Even with "supporters" in the White House, these assets could not escape the core cycle of cryptocurrency: price surge → leverage influx → liquidity drought. Bitcoin, as an industry benchmark, is likely to record an annual loss this year after its peak in October. For Trump-related assets, politics could bring short-term heat but cannot provide long-term protection.

——Olga Kharif (Reporter)

AI Trading: The Next "Big Short"?

This transaction was exposed in a routine disclosure document, but its impact was anything but "routine." On November 3, Scion Asset Management disclosed holding protective put options on Nvidia and Palantir Technologies—these two companies are the "AI core stocks" that have been driving the market higher over the past three years. Although Scion is not a large-scale hedge fund, its manager Michael Burry drew attention with this disclosure: Burry rose to fame for "predicting the 2008 mortgage crisis" in the book and movie "The Big Short," becoming a market-recognized "prophet."

The Exercise Prices of Options Are Shocking: NVIDIA's exercise price is 47% lower than the disclosed closing price, while Palantir's exercise price is a staggering 76% lower. However, the mystery remains unsolved: constrained by "limited disclosure requirements," outsiders cannot determine if these put options (contracts that give investors the right to sell stock at a specific price before a certain date) are part of a more complex trade; and the documents only reflect Sang's holdings as of September 30, leaving out the possibility of Burry reducing or exiting his position afterwards.

However, the market's doubts about the "overvaluation and high spending of AI giants" have long been piling up like "a stack of dry wood." Burry's disclosure is like a match igniting the dry wood.

Burry's Bearish Bet on NVIDIA and Palantir

The investor famous for "The Big Short" disclosed put option positions in the 13F filing:

Source: Bloomberg, data has been standardized based on the price increase percentage as of December 31, 2024

After the news was released, the world's most valuable stock, NVIDIA, plummeted, and Palantir also fell simultaneously. The Nasdaq index then experienced a slight pullback but these assets later recovered.

The exact profit Burry made from this is unknown to the public, but he left a clue on social platform X: stating that he bought Palantir put options at a price of $1.84, and these options saw an increase of up to 101% in less than three weeks. This disclosure exposes the doubts lurking in a market dominated by "a few AI stocks, a large influx of passive funds, and low volatility." Whether this trade is ultimately proven to be "foresight" or "overreaction," it confirms a pattern: once market belief wavers, even the strongest market narrative can quickly reverse.

—Michael P. Regan (Reporter)

Defense Stocks: The Eruption in the New World Order

The shift in the geopolitical landscape has caused the sector of "European defense stocks," once considered "toxic assets" by asset management companies, to erupt. Trump's plan to reduce support for the Ukrainian military has prompted governments across Europe to start a "military spending spree," leading to a sharp rise in the stock prices of regional defense companies: as of December 23, Germany's Rheinmetall AG has seen a year-to-date increase of about 150%, while Italy's Leonardo SpA has surged over 90% during the same period.

Previously, many fund managers avoided the defense industry due to the "Environmental, Social, and Governance" (ESG) investment principles, considering it too controversial. Now, they have changed their stance, with some funds even redefining their investment scope.

By 2025, European Defense Stocks Soar

The region's defense stocks surged more than during the early stages of the Russia-Ukraine conflict:

Source: Bloomberg, Goldman Sachs

"It was only at the beginning of this year that we reintroduced defense assets into ESG funds," said Pierre-Alexis Dumont, Chief Investment Officer at Sycomore Asset Management. "The market paradigm has shifted, and in a paradigm shift, we must both take responsibility and defend our values. Therefore, we are now focusing on assets related to 'defensive weapons.'

Stocks with ties to defense, from goggles manufacturers and chemical producers to a printing company, have been in high demand. As of December 23, the Bloomberg European Defense Stocks Index has risen over 70% year-to-date. This frenzy has also spread to the credit market: even companies indirectly related to defense have attracted many potential lenders; banks have even launched 'European Defense Bonds,' modeled after green bonds but with funds dedicated to weapon manufacturers and similar entities. This shift marks 'defense' transitioning from a 'reputational liability' to a 'public good' and confirms a truth: when geopolitical directions change, capital flows often move faster than ideological shifts.

—Isolde MacDonogh (Reporter)

Devaluation Trade: Fact or Fiction?

The heavy debt burden of major economies like the United States, France, Japan, along with countries' 'lack of political will to address debt,' has led some investors in 2025 to seek refuge in 'devaluation-resistant assets' like gold, cryptocurrency, while cooling off on government bonds and the US dollar. This strategy has been labeled with the bearish tag of 'Devaluation Trade,' inspired by history: rulers like the Roman Emperor Nero once used 'currency devaluation' to cope with fiscal pressures.

October saw this narrative peak: concerns about the US financial outlook, combined with the 'longest government shutdown in history,' prompted investors to look for safe havens outside the US dollar. During that month, gold and bitcoin simultaneously hit all-time highs—a rare synchronous moment for these two assets often seen as 'competitors.'

Gold Record

“Devaluation Trade” Fuels Precious Metals to Record High:

Source: Bloomberg

As a “narrative,” “devaluation” provided a clear explanation for the chaotic macro environment; but as a “trading strategy,” its actual impact is much more complex. Subsequently, the overall cryptocurrency market experienced a pullback, with Bitcoin prices plummeting; the US dollar stabilized somewhat; US Treasuries not only did not collapse, but are poised to have their best year since 2020—this reminds us that concerns about “fiscal deterioration” may coexist with “safe-haven demand,” especially during periods of slowing economic growth and peak policy rates.

The price movements of other assets have shown differentiation: the volatility of metals such as copper, aluminum, and even silver, is partly due to “concerns about currency devaluation” and partly driven by Trump's tariff policies and macro forces, blurring the boundaries between “inflation hedging” and “traditional supply shocks.” Meanwhile, gold continues to strengthen, hitting new all-time highs. In this field, “devaluation trading” remains effective—but it is no longer a complete rejection of “fiat currency,” but more of a precise bet on “interest rates, policy, and hedging demand.”

—Richard Henderson (Reporter)

South Korean Stock Market: “K-Pop Style” Surge

When it comes to plot twists and excitement, this year's performance of the South Korean stock market is enough to outshine a Korean drama. Under President Lee Jae-myung's policy to “boost the capital market,” as of December 22nd, the Korean benchmark index (Kospi) has surged over 70% in 2025, steadily moving towards Lee Jae-myung's “5000-point target” and easily topping the global major stock index gainers list.

It is not common for political leaders to openly set the “index level” as a target, and when Lee Jae-myung initially proposed the “Kospi 5000 point” plan, it did not attract much attention. Today, more and more Wall Street banks, including JPMorgan Chase and Citigroup, believe that this target is likely to be achieved by 2026—partly due to the global AI craze, as the Korean stock market, with its status as an “Asia AI core trading target,” has seen a significant increase in demand.

South Korean Stock Market Rebound

South Korean benchmark index surges:

Source: Bloomberg

In this "world-leading" rebound, there is one noticeable "absentee": South Korean retail investors. Despite Lee In-myeong often emphasizing to voters that "he was also a retail investor before entering politics," his reform agenda has not yet convinced domestic investors that the "stock market is worth holding long term." Even as foreign funds flow into the Korean stock market, local retail investors are still "net selling": they have poured a record $33 billion into the US stock market and pursued higher-risk investments such as cryptocurrency and overseas leveraged ETFs.

This phenomenon brings a side effect: pressure on the Korean won. Capital outflows have weakened the Korean won, also reminding the outside world: even as the stock market experiences a "sensational rebound," it may still mask domestic investors' "lingering doubts."

— Youkyung Lee (Reporter)

Bitcoin Showdown: Chanos vs. Saylor

Every story has two sides, and the arbitrage game between the short seller Jim Chanos and the "Bitcoin accumulator" Michael Saylor's Strategy company not only involves two highly individualistic figures but has also evolved into a "referendum" on "cryptocurrency-era capitalism."

In early 2025, as the price of Bitcoin soared, so did the price of Strategy's stock. Chanos saw an opportunity: the price of Strategy's stock was trading at a significant premium to its "Bitcoin holdings," a premium he believed was "unsustainable." Therefore, he decided to "short Strategy and go long on Bitcoin" and publicly disclosed this strategy in May (when the premium was still high).

Chanos and Saylor then engaged in a public war of words. In June, during an interview with Bloomberg TV, Saylor said, "I don't think Chanos understands our business model at all"; Chanos, in response, took to the social platform X and called Saylor's explanation "pure financial gibberish."

In July, Strategy's stock hit a record high, with a year-to-date gain of 57%; but as the number of "digital asset treasury companies" surged and cryptocurrency prices retraced from their highs, the stock prices of Strategy and its "imitators" began to fall, and the premium of Strategy relative to Bitcoin narrowed — Chanos's bet started to pay off.

This Year's Performance of Strategy Stock Lags Behind Bitcoin

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

Source: Bloomberg, Data has been normalized based on the percentage gain as of December 31, 2024

From Chamath's public "Short Strategy" to his announcement of "Exiting the Position" on November 7, Strategy's stock price dropped by 42%. Beyond just gains and losses, this case also revealed the cryptocurrency's "boom and bust cycle": the balance sheet expands due to "confidence," which relies on both "price appreciation" and "financial engineering" support. This pattern will continue to work until "faith falters" — at this point, the "premium" is no longer an advantage but instead becomes an issue.

—Monique Mulima (Reporter)

Japanese Government Bonds: From "Widow Maker" to "Rainmaker"

Over the past few decades, there has been a bet that has repeatedly tripped up macro investors — shorting Japanese government bonds, known as the "Widow Maker" trade. The logic behind this strategy seemed simple: Japan carried a massive public debt, so interest rates would "inevitably rise" to attract enough buyers; investors would thus "borrow government bonds and sell them," expecting to profit when "interest rates rise and bond prices fall." However, for many years, the Bank of Japan's accommodative policy has maintained low borrowing costs, causing "short sellers" to pay a heavy price — until 2025, when the situation finally reversed.

This year, the "Widow Maker" transformed into a "Rainmaker": Japanese benchmark government bond yields surged, turning the $7.4 trillion Japanese government bond market into a "short seller's paradise." Various triggers set this off: the Bank of Japan raising rates, Prime Minister Takanosae Koji introducing the "largest post-pandemic stimulus package." The benchmark 10-year Japanese government bond yield surpassed 2%, hitting multi-decade highs; the 30-year bond yield rose over 1 percentage point, setting new records. As of December 23, the Bloomberg Japan Government Bond Return Index has plummeted over 6% this year, becoming the worst-performing major bond market globally.

Sharp Drop in Japan Bond Market This Year

The Bloomberg Japan Government Bond Index is the worst-performing major bond index globally:

Source: Bloomberg, Data has been standardized based on percentage changes as of December 31, 2024, and January 6, 2025

Fund managers from Schroders, Jupiter Asset Management, RBC Global Asset Management, and other institutions have openly discussed "shorting Japanese government bonds in some form" this year; investors and strategists believe that with the rising benchmark interest rates, this trade still has room to run. Additionally, the Bank of Japan is reducing its bond purchase size, further driving up yields; and Japan's government debt-to-GDP ratio is "far ahead" among developed countries, with a "likely persistent" bearish sentiment towards Japanese government bonds.

——Cormac Mullen (Journalist)

Credit 'Squabble': Payoff of 'Hardball Strategy'

In 2025, the most lucrative credit payoff came not from 'betting on corporate recovery,' but from 'striking back at fellow investors.' This mode, known as 'creditor-on-creditor confrontation,' allowed institutions like Pacific Investment Management Company (Pimco), King Street Capital Management, to emerge victorious—a precise 'game' was orchestrated around Envision Healthcare, a medical enterprise under the KKR Group.

Post-pandemic, Envision, a hospital staffing provider, found itself in distress, in urgent need of loans from new investors. However, issuing new bonds required 'pledging already pledged assets': most creditors jointly opposed this plan, but Pimco, King Street Capital, Partners Group chose to 'switch sides' in support— their backing enabled the proposal of 'old creditors releasing pledged assets (equity of Amsurg, Envision's high-value outpatient surgery business), to secure the new bonds' to pass.

Amsurg’s sale to Ascension brought hefty returns for funds including Pacific Investment Management Company (Pimco). Photographer: Jeff Adams

These institutions then became 'bondholders secured by Amsurg' and eventually converted the bonds into Amsurg equity. This year, Amsurg was sold to the healthcare group Ascension Health for $4 billion. It is estimated that these 'backstabbing peers' obtained about 90% of the return—confirming the earning potential of 'credit squabbles'.

This case reveals the rules of the current credit market: lenient document terms, dispersed creditors, 'cooperation' not always necessary; 'being right' often insufficient, 'avoiding being surpassed by peers' is the bigger risk.

——Eliza Ronalds-Hannon (Journalist)

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

Since the financial crisis, mortgage giants Fannie Mae and Freddie Mac have been under U.S. government control, with 'when, how to exit government control' being a focal point of market speculation. Hedge fund manager Bill Ackman and other 'supporters' have held long positions for a long time, expecting windfall gains from a 'privatization plan,' but due to unchanged circumstances, the stocks of these two companies have lingered in the pink sheet market (OTC market) for years.

The landscape changed with Trump's reelection: the market optimistically anticipated that the "new administration would facilitate the two companies' exit from government control," and the stocks of Fannie Mae and Freddie Mac were instantly surrounded by "Meme Stock-like enthusiasm." In 2025, the hype intensified further: from the beginning of the year to the September high, the stock prices of both companies skyrocketed by 367% (intraday gains reaching 388%), becoming one of the standout winners of the year.

Fannie Mae and Freddie Mac Stock Prices Soar on Privatization Expectations

People were increasingly willing to believe that these companies would break free from government oversight.

Source: Bloomberg, data standardized based on percentage increase as of December 31, 2024.

In August, the news of the "government considering pushing the two companies for an IPO" propelled the hype to its peak—the market expected an IPO valuation exceeding $500 billion, with plans to sell 5%-15% of the shares to raise approximately $30 billion. Despite market skepticism about the specific timing of the IPO and whether it would actually materialize, causing price fluctuations since the September peak, most investors remained confident in this prospect.

In November, Ackman disclosed a proposal submitted to the White House, suggesting pushing Fannie Mae and Freddie Mac to relist on the New York Stock Exchange, while writing down the U.S. Treasury's preferred stock holdings in the two companies and exercising government-level options to acquire nearly 80% of the common stock. Even Michael Burry joined this camp: he announced his bullish stance on the two companies in early December and expressed in a 6000-word blog post that these two companies, once requiring government bailout to avoid bankruptcy, might no longer be the "toxic twins."

—Felice Maranz (Reporter)

Turkish Carry Trade: Total Collapse

After a strong performance in 2024, the Turkish carry trade became the "consensus choice" for emerging market investors. At the time, Turkish local bond yields exceeded 40%, and the central bank pledged to maintain a stable dollar-pegged exchange rate, attracting traders to borrow cheaply from abroad and invest in high-yielding Turkish assets. This trade attracted billions of dollars from institutions like Deutsche Bank, Millennium Partners Fund, and Glamesi Capital, with some institution personnel still in Turkey on March 19, and on that same day, the trade collapsed entirely within minutes.

The catalyst for the collapse occurred that morning: the Turkish police raided the popular Istanbul residence of the opposition party mayor and detained him. This event sparked a wave of protests, leading to a frantic sell-off of the Turkish lira, with the central bank powerless to stem the currency's free fall. Kit Jukes, then the head of foreign exchange strategy at Societe Generale in Paris, said, "Everyone was caught off guard, and no one will dare to return to this market in the short term."

University students hold Turkish flags and banners during a protest after Istanbul Mayor Ekrem Imamoglu's detention. Photographer: Kerem Uzel/Bloomberg

By the end of the day, the scale of capital outflows from Turkish lira-denominated assets was estimated at around $10 billion, and the market never truly recovered thereafter. As of December 23, the lira had depreciated by about 17% against the dollar for the year, making it one of the worst-performing currencies globally. This event also served as a warning to investors: high interest rates may bring returns to risk-takers, but they cannot withstand sudden political shocks.

— Kerim Karakaya (Reporter)

Bond Market: 'Cockroach Alert' Sounded

The credit market of 2025 did not plunge into turmoil due to a single 'black swan' event but was unsettled by a series of 'small-scale crises' that exposed some alarming vulnerabilities in the market. Companies once seen as 'routine borrowers' found themselves in consecutive distress, causing lenders to suffer heavy losses.

Saks Global restructured its $2.2 billion bond after only one interest payment, and the restructured bonds now trade at less than 60% of face value; New Fortress Energy's newly issued exchangeable bonds lost over 50% of their value within a year; Tricolor and First Brands went bankrupt, wiping out billions of dollars in bond value within weeks. In some cases, complex fraudulent activities were the root cause of corporate collapses, while in others, the optimistic performance expectations of the companies were simply not met. However, in either case, investors are left with a question: with little evidence that these companies could repay their debts, why were such large credit bets placed on them in the first place?

JPMorgan Chase is scorched by a credit 'cockroach,' with Jamie Dimon warning there may be more to come. Photographer: Eva Marie Uzcategui/Bloomberg

Years of low default rates and loose monetary policy have eroded various standards in the credit market—from lender protections to the underlying underwriting process. Lenders to First Brands and Tricolor, for instance, failed to spot violations such as 'double pledging collateral' and 'co-mingling collateral for multiple loans' at these two firms.

JPMorgan Chase is also one of these lending institutions. The bank's CEO, Jamie Dimon, issued a warning to the market in October, using a vivid analogy to remind investors to beware of subsequent risks: "When you see one cockroach, there are very likely more hiding in the dark." And this "cockroach risk" may well become one of the core themes of the 2026 market.

——Eliza Ronalds-Hannon (Reporter)

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