In early June 2025, a titanic public rift erupted between President Donald Trump and Tesla/SpaceX CEO Elon Musk, sending shockwaves through financial markets – including cryptocurrency. What began as a spat over Trump’s landmark “One Big Beautiful Bill” tax-and-spending legislation quickly spiraled into a personal Twitter and Truth Social war.
Trump and Musk traded barbs about deficits, electric-vehicle mandates and even the Jeffrey Epstein case, drawing in social media and news outlets. The skirmish coincided with sharp sell-offs in Bitcoin and other tokens, thrusting crypto volatility and investor sentiment into the spotlight.
This Forbes-style analysis reviews the unfolding Trump–Musk controversy and its immediate fallout, then breaks down five key consequences for the crypto ecosystem – from plunging token prices to shaken faith in cryptocurrency’s future.
Feud Erupts Over Spending Bill
The feud ignited when Elon Musk publicly criticized Trump’s proposed spending bill, calling it a “massive, outrageous, pork-filled Congressional abomination.”
Musk’s remarks targeted the “One Big Beautiful Bill,” which he argued would balloon deficits and undo the work of Trump’s own “Department of Government Efficiency” (DOGE). Trump, who had previously treated Musk as a trusted ally and even an advisor, quickly snapped back.
On June 5, the president broke his silence by defending the bill at a White House event, noting that Tesla had benefited from past subsidies and warning that Musk was now upset because he “knew…we were going to” roll back an EV mandate Trump had vowed to remove.
By early afternoon, Trump was unleashing a torrent of social media posts. In rapid-fire statements on his Truth Social platform, the president blasted Musk: “Elon was ‘wearing thin’…and he just went CRAZY!” Trump wrote, explaining that he had “took away his EV Mandate” and insinuating Musk’s anger was personal. He added that the quickest way to cut government spending would be to “terminate Elon’s Governmental Subsidies and Contracts,” saving “billions and billions of dollars”.
These comments marked a stark tone shift; earlier in their relationship Trump had praised Musk’s innovations, but now he appeared prepared to publicly undercut him.
Musk’s Explosive Counterattacks
Elon Musk answered in kind with a flurry of dramatic Twitter posts. Within minutes of Trump’s attacks, Musk retorted that his rival was lying and goaded him to act on his threats. “Such an obvious lie. So sad,” Musk scoffed on Twitter in response to Trump’s claims. A minute later, he taunted: “This just gets better and better…Go ahead, make my day,” daring Trump to cancel SpaceX and Tesla contracts.
But Musk saved his sharpest barbs for later. In a stunning 3:10 p.m. tweet, he claimed without evidence that President Trump was “in the Epstein files,” quipping “Have a nice day, DJT!”. The implication – that Trump’s political opponents were withholding Epstein-related documents – widened the feud’s intensity.
Minutes later Musk turned to SpaceX operations. On Twitter he wrote: “In light of the President’s statement about cancellation of my government contracts, @SpaceX will begin decommissioning its Dragon spacecraft immediately.” The Dragon capsule is currently NASA’s only means to send U.S. astronauts into orbit, so this threat was particularly pointed. Within hours this comment, too, was walked back by Musk, who later acknowledged he would not actually scrap the Dragon program.
Still, the barrage of Musk’s posts – calling Trump’s statements lies, predicting a recession from Trump’s tariffs, and hitting Trump on #Epstein – represented an unusually raw clash between two titans.
Market Shockwaves and Political Reactions
As the volley of accusations rolled out, markets tumbled. Tesla stock, which had already been under pressure in 2025, plunged over 14% on June 5 – wiping out roughly $150 billion in market value in a single day. Trump Media’s stock (DJT) fell even more on news of the spat. Crypto markets reacted in lockstep: Bitcoin slid back below $100,000, and the CoinDesk 20 crypto index fell nearly 5% by day’s end.
Dogecoin, long associated with Musk, plunged about 9%, while a Trump-themed Solana token also collapsed by double-digits in tandem with the feud .
The White House strove to downplay the spectacle. Press Secretary Karoline Leavitt called the Twitter war “an unfortunate episode from Elon,” suggesting that Musk was simply upset the legislation didn’t meet his preferences. “The President is focused on passing this historic piece of legislation and making our country great again,” Leavitt told reporters.
Market analysts noted the unusual fallout: one Wedbush strategist commented that it was “jaw-dropping” to see a friendship melt down and warned that the “Musk/Trump battle” could alter the regulatory outlook for Musk’s companies.
Another analyst pointed out that over the past 24 hours roughly $979 million of leveraged crypto positions were liquidated, a sign of manic volatility amid the chaos .
By that evening the president seemed to soften slightly, telling Politico that “it’s okay” about the spat and focusing again on policy priorities. Elon Musk, too, cooled his tone – agreeing with advice from billionaire investor Bill Ackman to “cool off” and later tweeting that his team would not actually dismantle the Dragon capsule.
But the damage was done: headlines from Tokyo to Wall Street were dominated by the very public blowup. In short order the Twitter war had erased tens of billions of dollars from Musk’s net worth (second only to his own 2021 Tesla plunge) and cast new uncertainty on the tech mogul’s projects .
Top 5 Consequences for the Crypto Market
As the Trump–Musk feud continued unfolding, crypto traders watched nervously. The incident underscored crypto’s sensitivity to macro headlines and political drama. Here are five major areas where the spat sent ripples through the crypto world:
Investor Sentiment Takes a Hit
The immediate effect was a jolt of fear and uncertainty among crypto investors.
Market sentiment gauges turned negative: CoinDesk reported Bitcoin dropping over 4% late Thursday, and Reuters noted “bitcoin prices tumbled 4% overnight” as the spat reached a fever pitch. By Friday morning the Crypto Fear & Greed Index had slumped from “Greed” levels (61 points a week prior) into the mid-40s, signaling neutral-to-fearful mood in the market. Traders and fund managers cited the bizarre spectacle as a factor unsettling buyers. According to crypto analytics firm Glassnode, long-term holders began selling into the rally of late May, suggesting that rising political turmoil made the absence of new bullish catalysts all the more acute .
In practical terms, panic selling followed the drama.
Many crypto positions were unwound; CoinTelegraph reported that more than $308 million of Bitcoin long bets were liquidated in 24 hours as prices broke lower. Even seasoned crypto bulls acknowledged the move was partly driven by news flow. One analyst said traders were “offside” after Bitcoin spiked to highs near $106K then slid sharply amid the Musk-Trump fallout. In short, the episode dented confidence, at least temporarily, reinforcing crypto’s reputation as a volatile, news-sensitive asset class.
Accelerated Price Volatility
Alongside sentiment, token price swings intensified. Major cryptocurrencies experienced swift moves: CoinTelegraph observed Bitcoin repeatedly swinging between $100K and $105K over hours as the news broke, and CoinDesk reported Solana and SUI each tumbling more than 7%.
Ether fell over 7%, Dogecoin fell 9% and XRP slid 4% in the same day. Memecoins and alt tokens generally underperformed leaders, giving back recent gains. Notably, a Trump-themed Solana meme token plunged nearly 10% to $9.82 amid the chaos, undercutting its already speculative value.
This volatility was exacerbated by forced liquidations. Benzinga reported that nearly $980 million of crypto positions were forcibly closed in the storm, with longs accounting for over $890 million of the liquidated value. Such margin calls reflect rapid price drops; they can accelerate a sell-off as exchanges unwind leveraged bets.
At one point, on- and off-ramp network CoinGlass saw over 220,000 traders liquidated across crypto markets in the 24 hours after the feud escalated.
Even relatively stablecoins bucked their normal resilience, as some algorithms struggled to maintain pegs amid the frenzy.
In real time, the swings rattled investors. One Wall Street trader noted that volatility “ping-ponged” after each tweet. As one asset manager put it, every Musk or Trump post became a de facto market event: if Musk hinted at problems in a project, crypto buyers would sell, and if Trump threatened Musk’s fortune, the market shuddered again. This dynamic underscored how the feud effectively inserted new uncertainty into cryptocurrency valuations. Algorithmic traders quickly factored in the extra risk, further amplifying swings. For hodlers and day-traders alike, the Musk-Trump row became yet another lesson that even tokens like Bitcoin – once considered a “safe haven” by some – can lurch on unrelated public drama.
Spark in Regulatory Discussions
The high-profile clash also ignited discussions about crypto regulation, though not yet in concrete rulemaking. Observers in Congress and regulatory agencies took notice of the stray issues highlighted by the feud – in particular the rise of political meme coins and celebrity endorsements. One immediate regulatory angle was the potential need to scrutinize crypto ads and claims.
For instance, Trump actively markets an “Official Trump” Solana token on Truth Social as a barometer of his political success, raising questions about disclosure and the SEC’s remit. Similarly, Musk’s love of Dogecoin and spin-off tokens has long drawn regulatory scrutiny; lawmakers might view this dust-up as further proof that crypto markets can be swayed by influential figures.
Legal experts told Reuters that the episode could put extra heat on agencies to enforce existing laws. Unlike the 2022 Tesla tweet saga (where SEC fined Musk over Doge tweets), this feud didn’t involve obvious fraud. But it highlights the opacity of some celebrity-driven crypto ventures. For example, regulators might finally look closely at the “Official Trump” token’s issuer: a Solana-based SPAC that the campaign touts (ticker TRUMP) is likely to attract more oversight in the wake of the market gyrations. Meanwhile, the Republican push on crypto – with some allies championing “transparent” stablecoins – could split, since Trump’s own crypto ambitions are unconventional. In short, any sudden crypto mania around Washington events tends to prod regulators into action.
Already, some commentators note that high-profile crypto wins (or chaos) are harder to ignore.
The SEC and CFTC hold regular hearings on crypto’s risks; the Musk-Trump conflict is sure to come up, likely prompting calls for clearer rules.
In Europe, similar dynamics may play out as regulators watch the U.S. scene.
While no new policies are yet on the books, insiders speculate that U.S. agencies will monitor social media-driven pumps more keenly. The timing is significant: Congress is also debating bipartisan stablecoin bills and crypto oversight this summer. If Twitter wars can sway markets to this degree, lawmakers may use the episode to justify stricter controls on crypto-market manipulation, or at least toughen rules for advertising crypto products.
Reputational Risk for Meme Coins and Branded Tokens
The Musk-Trump showdown put a glare on the odd corner of crypto where politics meets internet culture: meme coins. Dogecoin, the Shiba Inu-based token Musk famously promotes, saw a steep loss following the announcement that Musk would leave a Dogecoin foundation in April. It then plunged about 10% on June 5, extending a weeklong slide by over 20%. The timing – aligned with the feud – led observers to link Doge’s pain to Musk’s exit and public disputes. Even more directly, Trump’s own fanbase has minted tokens and NFTs around him. Benzinga highlighted that a Solana-based “Official Trump” memecoin fell nearly 10% as the drama unfolded, contradicting the campaign’s boast that his coin’s performance is “the ultimate measure” of his success .
Meanwhile, novel tokens sprang up literally in response. Crypto media reported that traders created a Solana meme coin called “Kill Big Beautiful Bill” (KBBB) to mock Trump’s spending bill name.
The KBBB coin rocketed to a $53 million market cap within hours, then tumbled 30% as quickly. This wild swing, and the fact that such a coin even existed, underscores reputational risk: whenever crypto dabbles in politics or insider jokes, large price moves can happen – which can reflect poorly on broader crypto credibility. If these tokens crash badly, casual observers may view crypto as a playground for cartoonish speculation rather than serious finance.
For the industry, these episodes reaffirm that the most meme-driven corners can magnify shock. Investors in meme coins tied to personalities must now factor in the risk that the underlying figure (e.g. Musk’s standing with Trump) could abruptly sour. Dogecoin’s recent drop was described by some market watchers as the “Musk slump,” while Trumpcoin’s slide suggests political allegiances can flip investor appetite.
Long-term, if prominent crypto enthusiasts become embroiled in disputes, it could tarnish the coins they champion.
A slump in Doge or Trumpcoins may not destroy crypto, but it erodes the hype narrative. Traders may start asking: what happens when other big personalities feud? The lesson is clear – token communities face reputational spillover from their human celebrities.
Long-Term Trust and Ecosystem Stability
Beyond the immediate price turbulence, many in the crypto world are pondering the longer-term impact on trust. Cryptocurrencies thrived in part on an image of tech-driven independence from politics, but high-profile entanglements with political figures risk muddying that image. If market movers like Musk or Trump can trigger large swings at a whim, casual investors might see crypto as risky, unpredictable or even rigged. That could dampen broader adoption. Some analysts warn that retail crypto users – especially new entrants drawn by stability and tech legitimacy – may get scared by the back-and-forth drama.
After all, if industry stalwarts can’t keep the peace, how trustworthy is the ecosystem?
On the flip side, others argue crypto communities have built-in resilience. The Cointelegraph coverage noted that, with Bitcoin on “very shaky ground,” some fundamental supporters saw profit-taking as overdue, implying the fever may break anyway. In that view, Musk’s barbs were simply catalysts in a market already due for a correction after May’s rally. But trust will be measured in how quickly markets settle. If prices recover swiftly once tempers cool, investors might shrug it off as just noise. If instead crypto lingers in a funk, regulators tighten rules, or sentiment remains jittery, the feud could leave a scar.
Importantly, the spat underscores one of crypto’s core tensions: it aspires to broad, technological independence, yet it is deeply affected by its community’s most famous voices. History shows that surprise tweets and media spectacles can cause sudden dumps (as seen with Musk’s Doge tweets in 2021).
Now a sitting president has similarly flexible rhetorical reach into the markets. Crypto evangelists had hoped decentralized finance might rise above partisan squabbles. The Trump-Musk episode is a reminder that personalities still matter – perhaps too much. For the decentralized future crypto promises, the episode may be a bump in the road, but its memory will loom. Observers will be watching whether the community adapts, for instance by improving decentralized governance or risk education, or if it remains exposed to the whims of headline-making titans.
Conclusion: Eyes on the Horizon
For stakeholders in crypto – from individual investors to institutional players and policymakers – the Trump–Musk feud is a vivid case study in how external drama can buffet markets. In the near term, traders will be watching whether tensions cool or flare up again.
Important indicators will include price action in Bitcoin and popular tokens (especially memecoins), shifts in sentiment indexes and any new heavy liquidations during volatility spikes. Regulators and lawmakers will be listening too: speeches or filings related to crypto promotion or advertising could hint at forthcoming oversight.
Longer term, the industry should watch how the dueling narratives play out. Will “crypto bros” embrace the chaos as meme culture, or will mainstream audiences recoil at the chaos? Either way, one lesson is clear: political drama has real consequences in digital markets. Cryptocurrencies, often pitched as visionary technology, are not immune from the realities of media and public opinion. Observers will be keen to see whether the market stabilizes after this flare-up or if the echo of June 2025’s Twitter war lingers. Investors and builders alike will now measure cryptocurrency risk not only by blockchains and code, but also by the moods of its most famous champions.