The year 2025 will be remembered for its extreme volatility, where established trends collapsed without warning and unconventional trades reached historic heights. From the rise and fall of "Trump trades" to the resurgence of European defense, the global financial landscape underwent a massive paradigm shift.
The Rise and Fall of Trump-Linked Crypto
Despite President Trump’s heavy pro-crypto stance and the appointment of industry allies to regulatory roles, tokens tied directly to his family faced a brutal year.
- The Launch Cycle: High-profile launches like the Trump family's memecoin, Melania’s token, and World Liberty Financial (WLFI) all followed a similar pattern: an initial rally followed by a total collapse.
- The Numbers: By late December, Trump’s token fell over 80%, while Melania’s dropped nearly 99%. Even Bitcoin ended the year in the red after failing to sustain its October peaks.
Burry vs. the AI Giants
Michael Burry, famous for "The Big Short," took aim at the AI-driven tech rally.
- The Puts: Burry’s Scion Asset Management revealed massive put options against Nvidia and Palantir.
- The Outcome: The move rattled the Nasdaq. Burry reported that his Palantir puts surged over 101% in less than three weeks, highlighting the fragility of a market concentrated in just a few tech names.
European Defense: A New ESG Paradigm
The shift in U.S. foreign policy regarding Ukraine forced Europe to accelerate its own defense spending, turning weapons manufacturers into the year’s hottest sector.
- Record Gains: Germany’s Rheinmetall gained 150%, while Italy’s Leonardo rose 90%.
- The Paradigm Shift: Institutional funds began re-labeling defense as "socially responsible," leading to the creation of "European Defence Bonds" to fund military infrastructure.
The "Debasement Trade" and the Return of Gold
During a record-breaking U.S. government shutdown in October, investors fled the dollar in what became known as the "debasement trade."
- Safe Havens: While Bitcoin initially spiked alongside gold, it eventually cooled. Gold, however, remained resilient, hitting new all-time highs fueled by global demand and the impact of Trump’s tariffs on raw materials.
Global Winners and Losers: Korea and Japan
- South Korea’s Paradox: The KOSPI index soared 70% under President Lee Jae Myung’s aggressive growth targets. However, local retail investors remained skeptical, moving $33 billion out of domestic markets and into U.S. assets.
- The "Widowmaker" Yields: After decades of failed bets, the short trade against Japanese Government Bonds (JGBs) finally paid off. As Japan hiked rates, JGBs became the world’s worst-performing bond market of the year.
The Strategy Inc. Clash
A high-profile feud broke out between Jim Chanos and Michael Saylor. Chanos shorted Strategy Inc. (a Bitcoin-heavy firm), arguing the stock’s premium was unsustainable. By November, Chanos closed the trade with the shares having plummeted 42%, proving that the "premium" trade had finally cracked.
December 2025, Cryptoniteuae