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

Written by: Bloomberg

Compiled by: Saoirse, Foresight News

Editor’s Note: After reviewing the ups and downs of the crypto industry in the 2025 FN Year-End Series, let’s broaden our perspective: the pulse of the global financial markets is often reflected in and intricately linked to the logic of the crypto space. This article focuses on 11 key transactions of the year, from cross-market trends to policy-driven asset volatility, revealing market patterns and risk insights that are equally worth considering for crypto practitioners, helping to clarify the overall financial landscape of the year.

It has been another year filled with "high-certainty bets" and "rapid reversals."

From bond trading desks in Tokyo, credit committees in New York, to forex traders in Istanbul, the market has brought both unexpected fortunes and severe volatility. Gold prices hit historic records, the stock prices of robust mortgage giants fluctuated wildly like "Meme stocks" (stocks driven by social media hype), and a textbook-level arbitrage trade collapsed in an instant.

Investors made significant bets around political changes, expanding balance sheets, and fragile market narratives, driving stock markets sharply higher and clustering yield trades, while cryptocurrency strategies often relied on leverage and expectations, lacking other solid support. After Donald Trump returned to the White House, global financial markets first suffered a sharp decline and then rebounded; European defense stocks ignited a frenzy; speculators sparked one market craze after another. Some positions reaped astonishing returns, but when market momentum reversed, financing channels dried up, or leverage had negative effects, other positions faced devastating losses.

As the year-end approached, Bloomberg focused on several notable bets of 2025— including success stories, failures, and those positions that defined the era. These trades left investors anxious about a series of "old problems" as they prepared for 2026: unstable companies, excessive valuations, and those "once effective, ultimately failing" trend-following trades.

Cryptocurrency: A Brief Frenzy of Trump-Related Assets

For the cryptocurrency sector, "massively buying all assets related to the Trump brand" seemed like an incredibly attractive momentum bet. During the presidential campaign and after taking office, Trump went "all in" in the digital asset space (according to Bloomberg Terminal reports), pushing for comprehensive reforms and placing industry allies in various powerful institutions. His family also jumped in, endorsing various tokens and cryptocurrency companies, which traders viewed as "political booster fuel."

This "Trump-related crypto asset matrix" quickly took shape: just hours before the inauguration, Trump launched a Meme coin and promoted it on social media; First Lady Melania Trump subsequently launched her own exclusive token; later that year, World Liberty Financial, associated with the Trump family, opened trading for its issued WLFI token for retail investors. A series of "Trump-related" trades followed—Eric Trump co-founded American Bitcoin, a publicly traded cryptocurrency mining company that went public through a merger in September.

In a Hong Kong store, a cartoon image depicting Donald Trump holding cryptocurrency tokens, with the White House in the background, commemorates his inauguration. Photographer: Paul Yang / Bloomberg

Each asset launch triggered a wave of increases, but each rise was fleeting. As of December 23, the Trump Meme coin performed poorly, down over 80% from its January peak; according to cryptocurrency data platform CoinGecko, the Melania Meme coin fell nearly 99%; American Bitcoin's stock price dropped about 80% from its September peak.

Politics provided momentum for these trades, but speculative patterns ultimately pulled them back to square one. Even with "supporters" in the White House, these assets could not escape the core cycle of cryptocurrency: price rises → leverage influx → liquidity exhaustion. Bitcoin, as an industry benchmark, is likely to record an annual loss this year after falling from its October peak. For Trump-related assets, politics can bring short-term heat but cannot provide long-term protection.

------ Olga Kharif (Reporter)

AI Trading: The Next "Big Short"?

This trade was revealed in a routine disclosure document, but its impact was anything but "routine." On November 3, Scion Asset Management disclosed that it held protective put options on Nvidia and Palantir Technologies—two companies that have been core stocks driving the market up over the past three years due to "artificial intelligence." Although Scion is not a large hedge fund, its manager Michael Burry drew attention to this disclosure: Burry gained fame for "predicting the 2008 subprime mortgage crisis" in the book and movie "The Big Short," becoming a recognized "prophet" in the market.

The strike prices of the options were shocking: Nvidia's strike price was 47% lower than its closing price at the time of disclosure, and Palantir's strike price was even 76% lower. However, the mystery remains unsolved: constrained by "limited disclosure requirements," it is unclear whether these put options are part of a more complex trade; moreover, the document only reflects Scion's holdings as of September 30, leaving open the possibility that Burry may have reduced or liquidated his position afterward.

However, the market's doubts about "overvalued, high-spending AI giants" had already piled up like "a pile of dry tinder." Burry's disclosure was like a match that ignited the tinder.

Burry's Bearish Bets on Nvidia and Palantir

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

Source: Bloomberg, data has been normalized according to percentage changes as of December 31, 2024

After the news broke, Nvidia, the world's highest market capitalization stock, plummeted, and Palantir also fell, with the Nasdaq index slightly retreating, although these assets later recovered.

It is unclear how much profit Burry made from this, but he left a clue on social media platform X, stating that he bought Palantir put options at $1.84, which soared by 101% in less than three weeks. This disclosure document thoroughly exposed the underlying concerns of a market dominated by "a few AI stocks, massive passive fund inflows, and low volatility." Whether this trade ultimately proves to be "prescient" or "premature," it confirms a rule: once market confidence wavers, even the strongest market narratives can quickly reverse.

------ Michael P. Regan (Reporter)

Defense Stocks: A Surge in the New World Order

The shift in geopolitical dynamics has led to a surge in "European defense stocks," which were once viewed as "toxic assets" by asset management companies. Trump's plan to reduce funding for the Ukrainian military prompted European governments to embark on a "military spending spree," causing defense companies' stock prices in the region to soar: as of December 23, shares of Rheinmetall AG in Germany rose about 150% this year, while Leonardo SpA in Italy saw an increase of over 90% during the same period.

Previously, many fund managers avoided the defense sector due to "environmental, social, and governance" (ESG) investment principles, deeming it "too controversial"; now, they have changed their stance, with some funds even redefining their investment scope.

Significant Rise in European Defense Stocks in 2025

Military stocks in the region have risen significantly since the onset of the Russia-Ukraine conflict:

Source: Bloomberg, Goldman Sachs

"Only at the beginning of this year did we reintroduce defense assets into our ESG funds," said Pierre-Alexis Dumont, Chief Investment Officer of Sycomore Asset Management. "The market paradigm has shifted, and during a paradigm shift, we must take responsibility while defending our values—therefore, we are now focusing on assets related to 'defensive weapons.'"

From goggle manufacturers and chemical producers to a printing company, stocks related to defense have been frantically bought. As of December 23, the Bloomberg European Defense Stocks Index has risen over 70% this year. This frenzy has also spread to the credit market: even companies "indirectly related" to defense have attracted a large number of potential lenders; banks have even launched "European Defense Bonds"—modeled after green bonds, but funds are specifically allocated for manufacturers of weapons and other entities. This change marks a repositioning of "defense" from "reputational liability" to "public good," confirming a principle: when geopolitical shifts occur, the speed of capital movement often outpaces ideological changes.

------ Isolde MacDonogh (Reporter)

Devaluation Trades: Fact or Fiction?

The heavy debt burdens of major economies such as the U.S., France, and Japan, along with a "lack of political will to address debt," prompted some investors in 2025 to flock to "anti-devaluation assets" like gold and cryptocurrencies, while enthusiasm for government bonds and the dollar waned. This strategy was labeled as "devaluation trades," inspired by history: rulers like the Roman Emperor Nero once responded to fiscal pressures by "diluting the value of currency."

In October, this narrative reached a climax: concerns about the U.S. fiscal outlook, combined with "the longest government shutdown in history," led investors to seek safe-haven tools outside the dollar. That month, gold and Bitcoin both hit historic highs—this was a rare moment of synchronization for two assets often viewed as "competitors."

Gold Records

"Devaluation trades" helped precious metals reach new highs:

Source: Bloomberg

As a "story," "devaluation" provides a clear explanation for a chaotic macro environment; but as a "trading strategy," its actual effects are much more complex. Subsequently, cryptocurrencies overall corrected, Bitcoin prices plummeted; the dollar stabilized; and U.S. Treasuries not only did not collapse but were on track for their best performance since 2020—this reminds us that concerns about "fiscal deterioration" may coexist with "demand for safe assets," especially during periods of slowing economic growth and peak policy rates.

The price movements of other assets showed divergence: the volatility of metals like copper, aluminum, and even silver stemmed partly from "concerns about currency devaluation" and partly from Trump's tariff policies and macro forces, blurring the lines between "inflation hedging" and "traditional supply shocks." Meanwhile, gold continued to strengthen, repeatedly setting new historical highs. In this realm, "devaluation trades" remain effective—but they are no longer a wholesale denial of "fiat currency," but rather a precise bet on "interest rates, policies, and demand for safe havens."

------ Richard Henderson (Reporter)

South Korean Stock Market: "K-Pop Style" Surge

When it comes to plot twists and levels of excitement, this year's performance of the South Korean stock market is enough to make K-dramas take a backseat. Under President Lee Jae-myung's policy to "boost the capital market," as of December 22, the South Korean benchmark stock index (Kospi) has risen over 70% in 2025, moving towards Lee's proposed "5000-point target," easily ranking first among major global stock indices in terms of gains.

It is rare for political leaders to publicly set "index points" as targets; when Lee Jae-myung first proposed the "Kospi 5000" plan, it did not attract much attention. Now, more and more Wall Street banks, including JPMorgan and Citigroup, believe this target is likely to be achieved in 2026—partly due to the global AI boom, with the South Korean stock market experiencing a significant increase in demand as an "Asian AI core trading target."

South Korean Stock Market Rebound

The South Korean benchmark stock index soared:

Source: Bloomberg

In this "globally leading" rebound, there is a noticeable "absentee": local retail investors in South Korea. Although Lee Jae-myung often emphasizes to voters that "he was also a retail investor before entering politics," his reform agenda has yet to convince domestic investors that "the stock market is worth holding long-term." Even with a massive influx of foreign capital into the South Korean stock market, local retail investors are still "net sellers": they have poured a record $33 billion into the U.S. stock market and pursued higher-risk investments such as cryptocurrencies and overseas leveraged ETFs.

This phenomenon has a side effect: the Korean won is under pressure. Capital outflows have weakened the won, reminding the outside world that even with a "sensational rebound" in the stock market, it may mask the "persistent doubts" of domestic investors.

------ Youkyung Lee (Reporter)

Bitcoin Showdown: Chanos vs. Saylor

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

At the beginning of 2025, Bitcoin prices soared, and Strategy's stock price surged in tandem, leading Chanos to see an opportunity: the premium of Strategy's stock price relative to its "Bitcoin holdings" was too high, and this legendary investor believed "this premium is unsustainable." Therefore, he decided to "short Strategy and go long on Bitcoin," publicly announcing this strategy in May (when the premium was still high).

Chanos and Saylor then engaged in a public debate. In June, Saylor stated in an interview with Bloomberg Television, "I think Chanos doesn't understand our business model at all"; Chanos retaliated on social media platform X, calling Saylor's explanation "utter financial nonsense."

In July, Strategy's stock price hit a record high, with a year-to-date increase of 57%; but as the number of "digital asset treasury companies" surged and cryptocurrency prices fell from their peaks, the stock prices of Strategy and its "imitators" began to decline, and the premium of Strategy relative to Bitcoin also shrank—Chanos's bet began to pay off.

This Year, Strategy's Stock Performance Lagged Behind Bitcoin

As the premium of Strategy disappeared, Chanos's short trade yielded returns:

Source: Bloomberg, data has been normalized according to percentage changes as of December 31, 2024

From Chanos publicly "shorting Strategy" to his announcement of "liquidating his position" on November 7, Strategy's stock price fell by 42%. Beyond the profits and losses themselves, this case also reveals the "repeated cycles of boom and bust" in cryptocurrency: balance sheets swell due to "confidence," which in turn relies on "price increases" and "financial engineering" for support. This model will continue to work until "confidence wavers"—at which point, the "premium" is no longer an advantage but rather a problem.

------ Monique Mulima (Reporter)

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

For decades, there has been a bet that has caused macro investors to "stumble repeatedly"—the "widowmaker" trade of shorting Japanese government bonds. The logic of this strategy seems simple: Japan carries a massive public debt, so interest rates "will eventually rise" to attract enough buyers; investors 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 easing policies have kept borrowing costs low, causing "short-sellers" to pay a heavy price—until 2025, when the situation finally reversed.

This year, the "widowmaker" transformed into a "rainmaker": yields on Japan's benchmark government bonds soared across the board, turning the $7.4 trillion Japanese government bond market into a "short-seller's paradise." The triggers were varied: the Bank of Japan raised interest rates, and Prime Minister Kishida Fumio launched "the largest post-pandemic spending plan." The yield on the benchmark 10-year Japanese government bond surpassed 2%, reaching a multi-decade high; the yield on 30-year bonds rose by over 1 percentage point, setting a historical record. As of December 23, the Bloomberg Japanese Government Bond Total Return Index has fallen over 6% this year, becoming the worst-performing major bond market globally.

This Year, the Japanese Bond Market Plummeted

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

Source: Bloomberg, data has been normalized according to percentage changes as of December 31, 2024, and January 6, 2025

Fund managers from institutions such as Schroders, Jupiter Asset Management, and Royal Bank of Canada BlueBay Asset Management have publicly discussed "shorting Japanese government bonds in some form" this year; investors and strategists believe that as the benchmark policy rate rises, this trade still has room to grow. Additionally, the Bank of Japan is reducing its bond purchase scale, further pushing up yields; and Japan's debt-to-GDP ratio is "far ahead" among developed countries, leading to a "potentially sustained" bearish sentiment towards Japanese government bonds.

------ Cormac Mullen (Reporter)

Credit "Infighting": Returns from "Hardball Strategies"

The most lucrative credit returns of 2025 did not come from "betting on corporate recovery," but rather from "retaliating against peer investors." This model, known as "creditor versus creditor confrontation," has led institutions like Pacific Investment Management Company (Pimco) and King Street Capital Management to achieve great success—they orchestrated a precise "game" around KKR Group's healthcare company Envision Healthcare.

After the pandemic, hospital staffing provider Envision fell into distress and urgently needed loans from new investors. However, issuing new debt required "collateralizing already pledged assets": most creditors united against this plan, while Pimco, King Street Capital, and Partners Group "switched sides" to support it—thanks to their backing, the proposal for "old creditors to release collateral (equity in Envision's high-value outpatient surgery business Amsurg) and guarantee new debt" was approved.

Amsurg's sale to Ascension brought substantial returns to funds including Pacific Investment Management Company (Pimco). Photographer: Jeff Adkins

These institutions then became "bondholders secured by Amsurg" and ultimately converted the bonds into Amsurg equity. This year, Amsurg was sold to healthcare group Ascension Health for $4 billion. Statistics show that these "betraying peers" institutions achieved returns of about 90%—confirming the profit potential of "credit infighting."

This case reveals the current rules of the credit market: loose document terms, dispersed creditors, and "cooperation" is not a necessity; "making the right judgment" is often not enough, and "avoiding being surpassed by peers" is a greater risk.

------ Eliza Ronalds-Hannon (Reporter)

Fannie Mae and Freddie Mac: The Revenge of the "Toxic Twins"

Since the financial crisis, mortgage giants Fannie Mae and Freddie Mac have been under U.S. government control, and "when and how to exit government control" has been a focal point of market speculation. Hedge fund manager Bill Ackman and other "supporters" have held long positions, hoping for "privatization plans" to yield huge profits, but due to the unchanged situation, the stocks of these two companies have languished in the pink sheets (over-the-counter market) for years.

Trump's re-election changed this situation: the market optimistically anticipated that "the new government would push the two companies out of control," and the stocks of Fannie Mae and Freddie Mac were suddenly surrounded by "Meme stock-style enthusiasm." In 2025, the heat further intensified: from the beginning of the year to the September peak, the stock prices of the two companies skyrocketed by 367% (with intraday gains reaching 388%), making them one of the year's standout winners.

Fannie Mae and Freddie Mac's Stock Prices Soared on Privatization Expectations

People are increasingly willing to believe that these companies will break free from government control.

Source: Bloomberg, data has been normalized according to percentage changes as of December 31, 2024.

In August, news that "the government is considering pushing the two companies for IPOs" pushed the heat to its peak—markets expected IPO valuations to exceed $500 billion, planning to sell 5%-15% of shares to raise about $30 billion. Although the market was skeptical about the specific timing of the IPO and whether it could truly materialize, leading to fluctuations in stock prices since the September peak, most investors remained confident in this prospect.

In November, Ackman announced a proposal submitted to the White House, suggesting the re-listing of Fannie Mae and Freddie Mac on the New York Stock Exchange while writing down the preferred shares held by the U.S. Treasury and exercising government-level options to acquire nearly 80% of the common stock. Even Michael Burry joined this camp: he announced a bullish stance on the two companies in early December and stated in a 6,000-word blog post that these companies, which once needed government intervention to avoid bankruptcy, might "no longer be the 'toxic twins.'"

------ Felice Maranz (Reporter)

Turkish Carry Trade: Total Collapse

After a stellar performance in 2024, the Turkish carry trade became the "consensus choice" for emerging market investors. At that time, Turkish local bond yields exceeded 40%, and the central bank promised to maintain a stable dollar-pegged exchange rate, prompting traders to flood in—borrowing cheaply from abroad to buy high-yield Turkish assets. This trade attracted billions of dollars from institutions like Deutsche Bank, Millennium Partners, and Gramercy Capital, with some personnel from these institutions still in Turkey on March 19, the day this trade collapsed completely in minutes.

The trigger for the collapse occurred that morning: Turkish police raided the home of a popular opposition mayor in Istanbul and detained him. This event sparked a wave of protests, and the Turkish lira faced a frenzied sell-off, with the central bank unable to stem the plummeting exchange rate. Keith Juckes, head of forex strategy at Société Générale in Paris, stated at the time: "Everyone was caught off guard; no one will dare to return to this market in the short term."

After the detention of Istanbul Mayor Ekrem İmamoğlu, students held Turkish flags and slogans during protests. Photographer: Kerem Uzel / Bloomberg

By the end of the day, the estimated outflow of funds from assets priced in Turkish lira was about $10 billion, and the market has not truly recovered since. As of December 23, the lira depreciated about 17% against the dollar for the year, becoming one of the worst-performing currencies globally. This event also served as a wake-up call for investors: high interest rates may bring returns to risk-takers, but they cannot withstand sudden political shocks.

------ Kerim Karakaya (Reporter)

Bond Market: "Cockroach Alert" Sounds

The credit market in 2025 did not plunge into turmoil due to a single "stunning collapse," but rather was stirred by a series of "small-scale crises" that exposed some unsettling hidden dangers in the market. Companies once viewed as "regular borrowers" fell into distress one after another, causing lenders to suffer heavy losses.

Saks Global restructured $2.2 billion in bonds after paying interest only once, and the restructured bonds now trade at less than 60% of par; New Fortress Energy's newly issued exchange bonds lost over 50% of their value within a year; Tricolor and First Brands filed for bankruptcy, erasing billions of dollars in debt value within weeks. In some cases, complex fraudulent activities were the root cause of corporate collapses; in others, the initially optimistic performance expectations simply did not materialize. But regardless of the circumstances, investors must face one question: why did they make large-scale credit bets on these companies when there is almost no evidence proving their ability to repay debts?

JPMorgan was burned by a credit "cockroach," and Jamie Dimon warned that there may be more to come. Photographer: Eva-Marie Uzkategi / Bloomberg

Years of low default rates and loose monetary policies have eroded various standards in the credit market—from lender protection clauses to basic underwriting processes. Institutions that lent to First Brands and Tricolor even failed to detect violations such as "repeatedly pledged assets" and "mixing collateral for multiple loans."

JPMorgan was also one of these lending institutions. In October, CEO Jamie Dimon issued a warning to the market, using a vivid metaphor to remind investors to be cautious of subsequent risks: "When you see one cockroach, there are likely many more hiding in the dark." This "cockroach risk" may become one of the core themes of the market in 2026.

------ Eliza Ronalds-Hannon (Reporter)