When the world’s most powerful man clashes with the richest, a catastrophe is imminent. Twitter couldn’t contain the public spat between the two giants who were once a united front. The Trump vs Musk Feud is something no one expected, and the result? Well! Tesla shares bled $150 billion. Of course, Tesla wasn’t the only thing affected – the crypto industry also declined. The total crypto market cap fell 2.30% to $3.21 trillion on June 6.
Elon Musk came to Washington to cut spending. Instead, he slashed the value of his own company’s stock by more than 20%. It doesn’t help that Tesla is also sitting on top of more than $1 billion in unsold Cyber trucks. And now, Elon Musk departs the Trump administration in a blaze of displeasure. Hostilities between Trump and his biggest campaign booster have reached a fever pitch, with the two billionaires duking it out on social media. However, our concern is whether the Trump Vs Musk feud will continue to impact the crypto market. Also, for how long, given that both have ties to cryptocurrency? Let’s find out in the blog.
Clash of the Titans: What Caused the Trump Vs Musk Row?
The once unbreakable alliance between the United States President and tech titan crumbled publicly over the GOP’s proposed spending bill, which recently passed the House. Musk, who worked as a “special employee” by heading the US Department of Government Efficiency, voiced his disapproval of the bill for its $2.4 trillion deficit impact. He added that the bill will plunge the United States into more debt, labeling the legislation as “disgusting.”
Trump, reacting to Musk’s criticism, expressed his disappointment, adding that the once unbreakable bond might be irrevocably damaged. He touted the bill to have a record cut in expenses and the biggest tax cut ever given. However, what aggravated the public spat was Trump’s announcement to terminate the governmental subsidies and contracts given to Musk by the Biden administration to reduce the budget. Musk promptly responded by saying Trump’s election victory wouldn’t have been possible without his support. This seemingly provoked Trump, who said, “Elon was wearing thin. I asked him to leave. I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY.”
The disagreement in policy spiralled into allegations and counter-allegations, culminating in Musk’s sensational claims about Trump’s alleged involvement with convicted sex offender Jeffrey Epstein. He claimed that Trump’s alleged ties were the reason the files were never released. In retaliation, Trump said Musk ousted their mutual friend, Jared Isaacman, from his NASA post. It didn’t stop there – Musk further accused Trump of steering the U.S. into recession, backed a post calling for impeachment, and pledged to shut down the Dragon spacecraft program.
Crypto Dips as Trump Vs Musk Conflict Erupts
Amid the scandal and intensifying rift, Tesla stock plunged 12%, depreciating by over $150 billion, on June 6th. However, it was the crypto market that was hit the most. BTC slumped to almost $100,000, declining by 3%. ETH fell 7% to $2,384, while XRP and Solana were down 4% and 5.2% respectively.
The crypto market’s downfall coincided with the liquidation of the futures market. The latter suffered a loss of $980 million, with long liquidations accounting for $874 million and short traders incurring $105 million. Bitcoin and Ethereum led the liquidations with $342.9 million and $285 million, respectively.
Any Hope for Reconciliation?
There were signs that Trump’s relationship with Musk could ease after the X owner said he was open to negotiations with the President on his social media account. However, Trump told CNN on Friday that he wasn’t even thinking about Musk, adding that the billionaire has “got a problem.”
The statement got many thinking that the once-formidable alliance would never be again. Matthew Britzman, an analyst at Hargreaves Lansdown and a Tesla shareholder, said he doesn’t see the relationship going back to how it was once. He, however, said the tension could ease if cooler heads prevail. “That would be a big improvement for Tesla,” he added.
Final Say
The Trump vs Musk rift was an unexpected twist. Hope for reconciliation is uncertain, and that could further impact the crypto and stock markets. While the crypto and stock markets are slightly recovering, uncertainty persists regarding their long-term growth.
