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 global financial markets often reflects and is inseparable from the logic of the crypto realm. 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.

This has been a 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 historical 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, ballooning balance sheets, and fragile market narratives, driving stock markets to soar and yield trading to cluster, while cryptocurrency strategies largely 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 warmed up; European defense stocks ignited a frenzy; speculators launched one market craze after another. Some positions yielded astonishing returns, but when market momentum reversed, financing channels dried up, or leverage had negative effects, other positions faced disastrous losses.

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

Cryptocurrency: A Brief Frenzy of Trump-Related Assets

For the cryptocurrency sector, "massive purchases of all assets related to the Trump brand" seemed like an extremely attractive momentum bet. During the presidential campaign and after taking office, Trump went "all in" on digital assets (according to Bloomberg Terminal reports), pushing for comprehensive reforms and placing industry allies in various powerful institutions. His family also joined 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 then introduced 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, commemorating 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, Melania's 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. As a barometer of the industry, Bitcoin 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 driven the market up over the past three years as "core AI stocks." Although Scion is not a large hedge fund, its manager Michael Burry drew significant attention to this disclosure: Burry gained fame for "predicting the 2008 subprime mortgage crisis" in the book and film "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, while Palantir's was even lower at 76%. However, the mystery remains unsolved: limited 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 reduced or liquidated his position afterward.

Nonetheless, market skepticism about "overvalued AI giants with high expenditures" had already piled up like "a pile of dry tinder." Burry's disclosure was akin to a match igniting that tinder.

Burry's Bearish Bet on Nvidia and Palantir

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

Source: Bloomberg, data normalized according to percentage increases 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 Burry profited from this, but he left a clue on social media platform X: he stated he bought Palantir put options at $1.84, which surged by 101% in less than three weeks. This disclosure document thoroughly exposed the underlying concerns of a market dominated by "a few AI stocks, a large influx of passive funds, and low volatility." Whether this trade ultimately proves to be "prescient" or "premature," it confirms a pattern: once market faith wavers, even the strongest market narratives can quickly reverse.

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

Defense Stocks: An Explosion Under the New World Order

The shift in geopolitical dynamics has led to an explosion in "European defense stocks," a sector once viewed as "toxic assets" by asset management firms. 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 industry 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 surged since the early days 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—thus we are now focusing on 'defensive weapon' related assets."

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

------ Isolde MacDonogh (Reporter)

Devaluation Trade: Fact or Fiction?

The heavy debt burdens of major economies such as the United States, France, and Japan, along with the "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 trade," inspired by history: rulers like Roman Emperor Nero once responded to fiscal pressures by "diluting the value of currency."

In October, this narrative reached its peak: concerns over 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 historical highs—this was a rare moment of synchronicity for two assets often viewed as "competitors."

Gold Record

"Devaluation trade" helped precious metals reach new highs:

Source: Bloomberg

As a "story," "devaluation" provides a clear explanation for the 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. Treasury bonds not only did not crash but were on track to have their best year since 2020—this reminds us that concerns over "fiscal deterioration" may coexist with "demand for safe assets," especially during periods of economic slowdown 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 over 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, constantly setting new historical highs. In this realm, "devaluation trade" remains effective—but it is no longer a complete 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 put K-dramas to shame. Under President Lee Jae-myung's policy to "boost the capital market," as of December 22, the benchmark stock index (Kospi) had 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 uncommon for political leaders to publicly set "index points" as targets; when Lee Jae-myung initially proposed the "Kospi 5000-point" 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, as the South Korean stock market has seen a significant increase in demand due to its identity as "Asia's core AI trading target."

South Korean Stock Market Rebound

The benchmark stock index in South Korea has soared:

Source: Bloomberg

In this "globally leading" rebound, there is a notable "absentee": local retail investors in South Korea. Despite Lee Jae-myung often emphasizing 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, chasing higher-risk investments like cryptocurrencies and overseas leveraged ETFs.

This phenomenon has a side effect: the Korean won is under pressure. Capital outflows have weakened the won, also 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 of 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 retorted on social media platform X, calling Saylor's explanation "utter financial nonsense."

In July, Strategy's stock price set a record, 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 normalized according to percentage increases 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 profit and loss itself, 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 "faith wavers"—at which point, "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 bears 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 benchmark 10-year Japanese government bond yield broke 2%, reaching a multi-decade high; the 30-year bond yield rose over 1 percentage point, setting a historical record. As of December 23, the Bloomberg Japanese Government Bond Return Index had 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 normalized according to percentage increases 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 benchmark policy rates rise, 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 of developed countries," leading to a "potentially sustained" bearish sentiment towards Japanese government bonds.

------ Cormac Mullen (Reporter)

Credit "Infighting": Returns from "Hardball Strategy"

The most lucrative credit returns in 2025 did not come from "betting on corporate recovery," but rather from "retaliating against peer investors." This model, known as "creditor versus creditor confrontation," allowed firms 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 found itself in trouble, urgently needing 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) to 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 about 90% returns—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, while "avoiding being surpassed by peers" poses 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 the control of the U.S. government, with "when and how to exit government control" being a focal point of market speculation. Hedge fund manager Bill Ackman and other "supporters" have held long positions, hoping for "privatization plans" to bring huge profits, but due to the unchanged situation, the stocks of these two companies have languished in the 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 increases reaching 388%), becoming one of the year's brightest 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 normalized according to percentage increases as of December 31, 2024.

In August, news that "the government is considering pushing for IPOs for the two companies" 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 in funds. Although the market remained 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 still held confidence in this prospect.

In November, Ackman announced a proposal submitted to the White House, suggesting pushing for Fannie Mae and Freddie Mac to relist 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 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 at low costs 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, when this trade collapsed completely within minutes.

The trigger for the collapse occurred that morning: Turkish police raided the residence of a popular opposition mayor in Istanbul and detained him. This event sparked a wave of protests, leading to a frantic sell-off of the Turkish lira, with the central bank unable to stem the currency's plunge. 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 Istanbul Mayor Ekrem İmamoğlu was detained, students held Turkish flags and slogans during protests. Photographer: Kerem Uzel / Bloomberg

By the end of that day, the estimated capital outflow of assets denominated in Turkish lira was about $10 billion, and the market never truly recovered afterward. As of December 23, the lira had 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 fall into turmoil due to a single "stunning collapse," but rather was disturbed by a series of "small-scale crises" that exposed some unsettling vulnerabilities in the market. Companies once viewed as "regular borrowers" fell into trouble one after another, causing lenders to suffer heavy losses.

Saks Global restructured $2.2 billion in bonds after only making one interest payment, and the restructured bonds now trade at less than 60% of face value; 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, overly optimistic performance expectations simply did not materialize. But in any case, investors must confront 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 could 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 lending to First Brands and Tricolor even failed to detect violations such as "double-pledging assets" and "mixing collateral management for multiple loans."

JPMorgan was also one of these lending institutions. In October, the bank's CEO Jamie Dimon issued a warning to the market, using a vivid metaphor to remind investors to be wary 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 central themes of the market in 2026.

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