The year 2025 was marked by highly active investment and rapid market changes. Gold surpassed previous highs to reach a new all-time high, while credit institution stocks that were once stable became volatile. The crypto market fluctuated wildly like a rollercoaster, and AI stocks heated up intensely, sparking a buying frenzy as investors chased returns.
At the end of this year, the news agencyBloombergcompiled "The Ultimate Bets of 2025" depicting an investment market with winners, wiped-out portfolios, and deals that have become symbols of the times. These all raise lingering questions for 2026: Is the market standing again on old cracks? Are fragile companies overvalued? And will trend-driven trading still work, or will it fail?
Since Donald Trump assumed the presidency, crypto market policies have been rolled out continuously, energizing the market. One of the most intriguing bets was the widespread choice to "buy everything related to Trump"—both during his campaign and after taking office. Trump showed firm support for digital assets and appointed crypto industry figures to key agencies.
The Trump family also fully entered the arena, with businesses and crypto coins. Meme coins began appearing before the inauguration, so after policies were announced, the family benefited accordingly. World Liberty Financial opened WLFI token trading to retail investors, while Trump's children became billionaires after leading American Bitcoin, a Bitcoin mining company that went public in September.
Every launch caused digital asset prices to surge sharply but not for long. As of 23 December, Trump's meme coin had fallen over 80% from its January peak; Melania's meme coin dropped nearly 99%; and American Bitcoin plunged about 80% from its September high.
Although politics created momentum, it could not overcome the harsh rules of speculation. Bitcoin itself was likely to end the year negative after falling from its October peak. In summary, for Trump-linked assets, politics provided a boost but not protection.
Will the AI bubble burst? This question was raised almost throughout the year as major companies invested heavily in infrastructure and developed more capable AI.
Another shock came when Michael Burry of Scion Asset Management, the legendary investor from The Big Short, disclosed holding put options to hedge Nvidia and Palantir stocks, two key AI-themed companies.
The puts for Nvidia were 47% below the closing price, and Palantir's were 76% below. Although the complexity of the deal or current holdings are unclear, this disclosure sparked intense doubts about the soaring valuations of AI stocks over recent years.
After the news, Nvidia and Palantir shares dropped sharply before recovering, and the Nasdaq followed suit. It is unknown how much Burry profited, but Palantir's put options bought at $1.84 surged over 101% within less than three weeks.
Rising public debt burdens in major economies like the U.S., France, and Japan, along with political reluctance to address the issue, led many investors in 2025 to believe in the concept called "Debasement Trade" —a bet that currencies will lose value.
This idea drove money into gold and alternative assets like crypto, while U.S. government bonds and the dollar came under scrutiny. The term references Emperor Nero's era, when silver coin values were reduced to solve fiscal problems.
This belief peaked in October amid growing concern over U.S. fiscal health and the longest government shutdown in history. Investors sought havens outside the dollar, coinciding with simultaneous record highs for both gold and Bitcoin.
However, the Debasement Trade turned out to be more complicated. Toward year-end, Bitcoin continued falling, the dollar stabilized, and U.S. government bonds did not collapse as expected. Instead, they were set to close the year at their best levels since 2020, showing that fear of currency debasement can coexist with demand for safe assets, especially amid economic slowdown and peak interest rates.
Regarding volatility and plot twists, South Korea's stock market in 2025 rivaled a K-Drama series. The main index surged over 70% within the year (as of 22 December), making it one of the hottest markets globally.
A key driver was President Lee Jae-myung's serious push for the "Kospi 5000" agenda, an unprecedented direct stock index target by a national leader.
Once seen as political sloganeering, major banks like JPMorgan and Citi now believe this target could be met in 2026, supported by the global AI trend that positions South Korea as Asia's main "AI Play" market.
Despite foreign capital inflows, domestic retail investors remained disengaged, continuously selling local stocks and moving over $33 billion into U.S. stocks, crypto, and leveraged ETFs instead.
The result was a weaker won, indicating that despite a soaring stock market, domestic confidence has yet to fully return.
This was not just a financial deal but a clash of worldviews between legendary short-seller Jim Chanos and ardent Bitcoin believer Michael Saylor.
In early 2025, as Bitcoin surged, Saylor's company Strategy (formerly MicroStrategy) shares rose even more, as the market valued firms holding large Bitcoin reserves on their balance sheets. Chanos saw this premium as unjustified, shorted Strategy, bought Bitcoin, and publicly announced this in May, igniting a fierce media and social debate.
Strategy shares peaked in July but then plummeted as other companies worldwide imitated the Bitcoin treasury model, and crypto prices weakened, causing heavy declines in Strategy stock.
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Since Chanos's revelation, Strategy shares have fallen over 42% since November, reinforcing the crypto world's lesson that belief builds balance sheets and balance sheets support belief until that belief starts to falter.
For decades, shorting Japanese bonds was considered a trap that burned countless investors, earning the nickname Widowmaker because early entrants were often severely hurt by the Bank of Japan's low-interest policies.
But in 2025, everything changed. Japanese government bond yields surged sharply due to factors like interest rate hikes, massive government stimulus, and the BOJ's reduced bond purchases.
The 10-year yield surpassed 2%, the highest in decades, while 30-year bonds set new records. Bloomberg's Japanese government bond index fell over 6%, the world's worst performance this year. Leading funds from Schroders, Jupiter, and RBC BlueBay agreed this trade is far from over.
In 2025, the bond market was shaken not by a single collapse but by a series of smaller deal failures gradually exposing troubling credit market behaviors.
Companies once seen as ordinary debtors faced severe financial troubles, leaving lenders to bear substantial losses.
Saks Global had to restructure $2.2 billion in bonds after paying interest only once, and even after restructuring, new debt traded below 60 cents on the dollar. New Fortress Energy's recently exchanged bonds lost more than half their value within a year.
Bankruptcies of Tricolor and later First Brands wiped out billions of dollars in debt value within weeks. Some cases involved fraud, while others resulted from companies failing to meet optimistic projections.
In all cases, investors faced the unavoidable question: why did they risk large sums on companies with little evidence they could repay?
Years of low default rates and abundant liquidity eroded lending standards, from lender protections to basic credit checks. The First Brands and Tricolor cases revealed lenders failed to detect debtors pledging the same assets multiple times and mixing collateral across different loans.
Among these lenders was JPMorgan, whose CEO Jamie Dimon warned in October that the problem is far from over, likening it to seeing one cockroach and suspecting more are hidden. This warning may become a key market theme in 2026.
Source:Bloomberg
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