The ongoing clash between the U.S. President Donald Trump and billionaire Elon Musk has sent shockwaves through global markets, culminating in a sharp decline in Bitcoin’s price to near $100,000. The feud, which intensified over Trump’s proposed tariffs on European goods, has also triggered broader volatility in cryptocurrencies and stocks, with Tesla’s shares plummeting 14% in a single day. This article explores the causes and consequences of the market turmoil, highlighting the fragile interplay between politics, crypto, and traditional finance.
The Conflict: Trump’s Tariffs vs. Musk’s Pushback
The crisis began on June 5, 2025, when Musk publicly criticized Trump’s proposed tariffs on European imports, calling them a catalyst for a looming recession. In a tweet, Musk declared, “The Trump tariffs will cause a recession in the second half of this year,” sparking a heated exchange between the two billionaires. Trump retaliated via Truth Social, threatening to revoke government contracts from Musk’s companies, including SpaceX, claiming it would save taxpayers “billions.”
Musk escalated the feud by suggesting SpaceX might halt production of its Dragon spacecraft, though he later walked back the statement. The rhetoric spilled into financial markets, with Bitcoin’s price dropping nearly 3% to $100,500—a level not seen since early 2025—before rebounding slightly to $103,200 by press time.
Bitcoin’s Rollercoaster: Fear and Liquidations
The crypto market reacted sharply to the geopolitical tension. Bitcoin’s 24-hour trading volume surged, but selling pressure triggered $341 million in liquidations of long positions, according to data from Coinglass. The broader crypto market capitalization fell by 4%, with Ethereum down 5.6%, XRP losing 2.8%, and Solana dropping 3.2%.
The Bitcoin price drop mirrored a similar crash on May 23, when Trump’s threat of 50% tariffs on EU goods caused a 3% plunge in a single hour. Analysts noted that the prolonged feud has eroded investor confidence, pushing the Crypto Fear & Greed Index to 45—a level classified as “Fear” on Alternative.me’s scale.
Tesla’s Stock Tanks Amid Crossfire
The fallout extended to traditional markets. Tesla’s shares (TSLA) plummeted 14.26% to $284.70, according to Google Finance, as investors questioned Musk’s ability to navigate political headwinds while managing his business empire. The sell-off underscored the interconnectedness of Musk’s ventures, from electric vehicles to crypto, with Bitcoin often serving as a barometer for his sentiment.
Analysts Weigh In: Recession Fears vs. Crypto’s Resilience
Market analysts are divided on whether the Bitcoin crash signals a broader crypto winter or a temporary correction.
- Bullish View: “Bitcoin’s price dip is overblown,” said crypto analyst John McAfee. “The network’s fundamentals—like energy-efficient mining and institutional adoption—are stronger than ever.”
- Bearish View: “Political instability and economic uncertainty will keep Bitcoin volatile,” warned Cointelegraph contributor James Cook. “Until Trump and Musk resolve their feud, crypto remains a risk asset”.
Meanwhile, the conflict has reignited debates over crypto’s role as a hedge against inflation and geopolitical turmoil.
Historical Context: A Pattern of Musk-Trump Tensions
This isn’t the first time Musk’s public clashes have shaken markets. In 2022, his “Twitter acquisition” tweet caused a stock surge, while his 2021 comments on Bitcoin’s energy use triggered a 15% dip in its price. Trump, too, has long courted crypto skeptics, with his 2023 executive order calling for stricter regulations on stablecoins.
What’s Next for Crypto and Markets?
- Tariff Resolution: A potential cooling of U.S.-EU trade tensions could stabilize Bitcoin, but analysts warn of prolonged volatility until the tariff issue is resolved.
- Regulatory Clarity: Musk has advocated for crypto-friendly policies, while Trump’s rhetoric suggests a hardline stance, creating uncertainty for investors.
- Market Sentiment: The fear-driven sell-off may persist unless institutions step in to buy the dip, as they did during the 2022 crash.
Conclusion: A Crossroads for Crypto
The Trump-Musk feud has exposed crypto’s vulnerability to macroeconomic and political headwinds. While Bitcoin’s price rebounded slightly, the broader market remains fragile. For crypto to thrive, it must navigate not only regulatory hurdles but also the whims of influential figures like Musk and Trump. As one trader quipped, “Bitcoin’s future isn’t just in code—it’s in politics”.