"Investors bet big on shifting politics, bloated balance sheets and fragile narratives, fueling outsized stock rallies, crowded yield trades, and crypto strategies built on leverage, hope, and not much else. Donald Trump's White House return quickly sank - and then revived - financial markets across the world, lit a fire under European defense stocks, and emboldened speculators fanning mania after mania. Some positions paid off spectacularly. Others misfired when momentum reversed, financing dried up or leverage cut the wrong way."
"Crypto: Trumped It looked like one of crypto's more compelling momentum bets: load up on anything and everything tied to the Trump brand. During his presidential campaign and after he took office, Trump went all-in on digital assets - pushing sweeping reforms and installing industry allies across powerful agencies. His family leaned in, championing coins and crypto firms that traders treated as political rocket fuel."
Markets in 2025 were driven by high-conviction, crowded wagers that produced large wins and rapid reversals. Traders across bonds, credit, currencies and equities chased stretched narratives, fueling outsized stock rallies, crowded yield trades and leveraged crypto strategies. Gold reached record highs while major mortgage lenders experienced meme-stock-like volatility. A textbook carry trade collapsed suddenly, amplifying losses for participants. Donald Trump's return to the White House moved global markets, boosted European defense stocks and powered politicized crypto rallies tied to the Trump family. Many successful positions coexisted with abrupt wipeouts as financing dried up, momentum reversed and leverage magnified losses, leaving investors wary heading into 2026.
Read at The Mercury News
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