The conflict between Elon Musk and Donald Trump extends beyond politics, affecting financial markets. Falling Tesla stocks and pressure on Bitcoin are raising investor concerns.
Tesla Stock Tanks After Political Showdown
Since Musk publicly criticized Trump's $5 trillion spending bill in June and launched his new political group, the America Party, Tesla shares have dropped 14%. On July 7 alone, they fell another 6.8%, wiping out $79 billion in value. Investors are worried that with Republicans now holding power across all three branches of the U.S. government, Tesla could lose its favorable treatment, especially regarding government support for electric vehicles.
Tesla's Crypto Holdings Become a Market Risk
Tesla owns 11,509 BTC, originally valued at $1.2 billion. However, with Bitcoin down 12%, that stash is now worth around $951 million. If Tesla's stock keeps falling, Musk may need to sell some of the company's Bitcoin to raise cash. This could trigger a chain reaction in the crypto market, where investor sentiment is already shaky, and a major sell-off by Tesla would deepen the uncertainty.
Tesla's Future and Its Impact on Bitcoin
Thanks to new FASB accounting rules in 2025, Tesla must now report quarterly valuations of its Bitcoin holdings. Earlier this year, when Bitcoin dropped to $93,000, Tesla took a hit. In Q4 2024, when Bitcoin spiked to $106,000, the company saw a $600 million boost in profits. Investors are now speculating about Musk's next move, knowing that selling could crash prices while holding could signal strength and help stabilize the crypto market.
Musk's next move is crucial for the market. If he holds Tesla's Bitcoin, it may stabilize crypto trading. If he is forced to sell, it could spark another wave of volatility.
