In early June 2025, a public conflict erupted between U.S. President Donald Trump and Tesla and SpaceX CEO Elon Musk. This controversy had notable impacts on financial markets, including cryptocurrency.
Origin of the Budget Conflict
The feud began when Elon Musk publicly criticized Trump's proposed spending bill, labeling it a 'huge, outrageous abomination.'
Musk highlighted the 'One Big Beautiful Bill,' arguing it would inflate the deficit. Trump, who had previously seen Musk as a trusted ally, quickly defended the bill at a White House event.
Musk's Explosive Counterattacks
Elon Musk responded with a flurry of sharp Twitter posts, claiming Trump was lying and provoking him to follow through on his threats.
Musk notably hinted at Trump's alleged connections to the Jeffrey Epstein case, escalating the conflict further. He suggested that SpaceX might decommission its Dragon spacecraft following Trump's comments on contract cancellations.
Key Consequences for the Crypto Market
The Trump-Musk feud triggered sharp fluctuations in the crypto market. Following the public spat, Tesla's stock plummeted over 14%, while Bitcoin fell below $100,000.
During this chaos, approximately $979 million in open crypto positions were liquidated, leading to panic selling. An analysis of key consequences shows:
1. **Worsening Investor Sentiment**: Rapid price drops spooked many traders, prompting sell-offs. 2. **Increased Price Volatility**: Major cryptocurrencies experienced significant swings, with Bitcoin and Dogecoin at the forefront. 3. **Regulatory Discussions**: The conflict sparked discussions about crypto regulations, especially regarding the influence of celebrities on the market.
The Trump-Musk conflict serves as an important lesson for crypto investors, highlighting the significance of external factors and celebrity influence on the market. The future of cryptocurrency depends on positive changes within the industry and adaptation to political shifts.
