Corporate and Political Titans Clash: Crypto Shakeup Amid the Trump-Musk Conflict
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In just one whirlwind week, the relationship between the U.S. President Donald John Trump and global billionaire Elon Musk flipped dramatically, from trusted White House allies to fierce social media rivals. What started as policy disagreements quickly escalated into a very public clash, revealing tensions that go far beyond personal grudges and sending shockwaves through the future of the cryptocurrency market.
1. From Political-Business Alliance to Open Breakup
The "honeymoon period" between Trump and Musk began when Trump returned to the White House and courted the tech industry. In early 2025, the Trump administration launched the “American Strategic Bitcoin Reserve” policy, announcing plans to reserve Bitcoin and other major cryptocurrencies, positioning the U.S. as a global crypto hub. Meanwhile, Musk’s companies benefited from these policies, with Tesla continuing to receive electric vehicle tax credits and SpaceX securing billions in government contracts.
However, tensions emerged in June 2025 when Trump announced the so-called “One Big Beautiful Bill Act.” The legislation was criticized for cutting electric vehicle subsidies, increasing the fiscal deficit, and including significant government spending. Musk publicly denounced the bill as a “disgusting abomination.” He further escalated the conflict by suggesting possible ties between Trump and Jeffrey Epstein, provoking a larger dispute.
Trump swiftly retaliated, warning that if Musk supported Democratic candidates, he would face “serious consequences,” including the potential revocation of federal contracts for Musk’s companies, such as Tesla and SpaceX. The confrontation intensified, with public opinion and markets reacting in kind.
2. Stock Market and Crypto Shakeup: Markets Tumble Together
2.1 Tesla Stock Plummets, Valuation Evaporates
Due to the bill’s proposed cuts to electric vehicle subsidies and emerging contract risks, concerns about Tesla’s future demand and policy dependence intensified. Tesla’s stock price plunged 14% on the day, wiping out approximately $150 billion in market value. Additionally, trading volume for both call and put options surged, reflecting heightened volatility.
2.2 Crypto Market Takes a Heavy Hit, Bulls Forced to Liquidate
The crypto market saw even more severe fluctuations. Following the outbreak of the dispute, panic selling ensued, triggering massive liquidations:
- Bitcoin (BTC) price dropped rapidly from around $105,915 to below $100,500, with over $300 million in long positions liquidated
- Ethereum (ETH) fell about 6%, signaling broad market risk aversion
- DOGE, a key crypto asset supported by Musk, dropped more than 12% over the week, hitting a low of $0.16805 at one point
- TRUMP token fell to $9.314 on the day, resulting in about $900 million in losses
Data from Coinglass shows the crypto market lost approximately 5.1% of its total market cap in a single day, erasing nearly $1 billion in value.
3. Complex Market Analysis
3.1 Negative Impact on the Cryptocurrency Market
The conflict between Trump and Musk has undeniably intensified market volatility, creating uncertainty about their relationship’s future. This uncertainty has caused significant price fluctuations in cryptocurrencies, which may deter some investors from entering the market and undermine overall stability. During escalations, the crypto market could face increased selling pressure. Moreover, their dispute is likely to draw greater regulatory scrutiny. The Trump administration may strengthen crypto regulations to mitigate potential market risks and financial crimes. Such regulatory pressure would negatively affect the crypto market, especially projects and platforms with weaker compliance. Investors must closely monitor policy changes to avoid potential risks.
As tensions rise, some investors may withdraw funds from crypto markets to safer investments, reducing liquidity and pressuring prices. This is particularly risky for crypto projects heavily reliant on market sentiment and capital flows.
3.2 Positive Impact on the Cryptocurrency Market
Amid escalating conflict and rising macro risks, cryptocurrencies are gaining attention as hedging tools.
The increased uncertainty is driving some investors to shift funds from traditional finance to crypto assets seeking stability. Although Bitcoin’s price briefly dipped, it quickly stabilized, demonstrating market resilience and its potential as a safe haven.
The Bitcoin community has also responded proactively, encouraging Musk to invest heavily in Bitcoin and promote its adoption on company balance sheets like Tesla’s. This move challenges traditional finance and reflects strong confidence in Bitcoin’s future.
From a regulatory standpoint, if the Trump administration seeks to mend ties with the tech sector and promote a more open crypto regulatory framework, the market could see mid- to long-term benefits. While regulatory uncertainty remains, a more inclusive approach would boost confidence, attract capital, and foster innovation, helping the industry grow. Therefore, the direction of the Trump administration’s crypto policies will be a key factor to watch in the coming period.
4. Balancing Short-Term Volatility and Long-Term Strategy
In the short term, with Trump and Musk deleting posts on social media and media coverage intensifying, market sentiment is expected to remain turbulent. Investors should closely monitor the government’s stance, especially whether Trump will push for contract reviews or subsidy cancellations, which could further undermine market confidence. Conversely, if the dispute de-escalates, the market may experience a brief period of stabilization.
In the medium term, the cryptocurrency market may undergo a technical and capital reshuffle centered around Musk. Moves such as full Bitcoin holdings, restoring $DOGE payment support, and promoting on-chain commercial applications could become new trends. Additionally, if the Trump administration seeks to mend relations with the tech sector, it may introduce more lenient crypto regulations or expand government digital asset reserves, benefiting the market in the mid to long term.
In the long term, investors should consider diversifying their holdings in digital assets to mitigate regulatory and geopolitical risks. Bitcoin, Ethereum, stablecoins, and major blockchain institutional funds could serve as options for risk diversification and steady returns. It is also crucial to closely watch Musk’s moves; if he launches “The America Party” and integrates social platforms and other resources, this could form a more systematic political and technological alliance with far-reaching effects on the future crypto ecosystem.
5. Navigating the Market: Opportunities Amid Risks
The public feud between Trump and Musk reflects the tech industry’s dual concerns about policy dependence and risk management—balancing commercial interests and subsidies against political maneuvering and free speech. For the crypto market, this turmoil exposes high volatility risks but also reinforces the value of decentralized assets as hedging tools.
For users, understanding market trends is more important than blindly chasing gains or losses. Risk management remains central, and any new signals regarding policy shifts, public opinion, or the stances of Trump and Musk could trigger market changes. In this environment, MEXC is a platform worth considering for trading Bitcoin, DOGE, TRUMP, and other crypto assets. With its efficient listing process, competitive low trading fees, and outstanding liquidity, MEXC has earned the trust and favor of many investors, making it a top choice for entering the crypto space.
Disclaimer: The information provided in this material does not constitute advice on investment, taxation, legal, financial, accounting, or any other related services, nor does it serve as a recommendation to purchase, sell, or hold any assets. MEXC Learn offers this information for reference purposes only and does not provide investment advice. Please ensure you fully understand the risks involved and exercise caution when investing. MEXC is not responsible for users' investment decisions.