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|5 min ReadThe 2025 Trading Playbook: Political Beta, Whale Shorts, And The Return Of The Widowmaker
Carter Hayes
Senior Analyst
Published
Jan 16, 2026
The books are closed on 2025.
We analyzed Bloomberg’s review of the year's definitive trades. The theme is violent: Political volatility crushed fundamental analysis.
Traders who bet on "narratives" (Trump, AI, Debasement) made fortunes, provided they exited fast. But the real alpha came from the contrarians. From Michael Burry shorting the AI top to Jim Chanos breaking the MicroStrategy premium, here are the winners and losers of a year defined by leverage and chaos.
The Trump Trade Was A Trap
The Narrative: Trump returns. Buy everything with his name on it.
The Reality: A classic "Sell the News" event.
The "Trump Crypto Matrix" disintegrated immediately after the inauguration.
Trump Meme Coins: Down 80% from highs.
Melania Token: Down 99%.
American Bitcoin (Mining): Down 80%.
Politics provided the ignition, but lack of liquidity provided the crash. The lesson is brutal: Political beta is fuel for a trade, not a foundation for an investment.
The Big Short 2.0: Burry vs. AI
While the world was long Nvidia, Michael Burry (Scion Asset Management) was quietly buying puts.
In a filing that shocked the market, Burry disclosed massive bearish positions against Nvidia (-47% strike) and Palantir (-76% strike).
Burry bet that the "AI Valuation Bubble" was fragile. He claimed to have bought Palantir puts at $1.84 and watched them soar 101% in three weeks as the market wobbled. His entry marked the exact moment market psychology shifted from "Growth at any cost" to "Show me the ROI."
The Privatization Pump: Ackman's 367% Gain
Fannie Mae & Freddie Mac have been dead money for a decade. Until Bill Ackman stepped in.
Betting on a Trump-led privatization, the "Toxic Twins" staged a violent resurrection, rallying 367% year-to-date.
This wasn't about fundamentals; it was pure regulatory arbitrage. Ackman proposed relisting them on the NYSE, and even Michael Burry joined the long side. This trade proved that in 2025, a single policy memo was worth more than ten earnings reports.
The MSTR Premium Collapsed
Long Bitcoin / Short MicroStrategy was the smart money arbitrage of the year.
Jim Chanos called out the unsustainable premium of Michael Saylor's company. Saylor called it "financial gibberish." Chanos won.
As the "treasury strategy" became commoditized, MSTR's stock decoupled from BTC. The premium evaporated, and the stock fell 42% from the moment Chanos announced his short. The arb closed.
The Widowmaker Finally Paid Out
For decades, shorting Japanese Government Bonds (JGBs) was called the "Widowmaker" because it bankrupted everyone.
In 2025, the Widowmaker became the Rainmaker.
Triggered by the BOJ hiking rates, the JGB market collapsed. Yields on the 10-year crossed 2%. The Bloomberg JGB Index fell 6%, making it the worst-performing major bond market on earth. The short trade finally worked.
Speed Round: The Outliers
The K-Pop Pump: South Korea's KOSPI index rallied 70% on AI demand, despite retail investors fleeing to US markets. The chart below shows the violence of the move.
The War Trade: European Defense stocks surged on re-armament fears. Rheinmetall gained 150%.
The Rug Pull: The Turkey Carry Trade imploded in minutes after the Mayor of Istanbul was detained. Billions fled, and the Lira collapsed.
Disclaimer: This document is intended for informational and entertainment purposes only. The views expressed in this document are not, and should not be taken as, investment advice or recommendations. Recipients should do their own due diligence, taking into account their specific financial circumstances, investment objectives and risk tolerance, which are not considered here, before investing. This document is not an offer, or the solicitation of an offer, to buy or sell any of the assets mentioned.