Power Struggle: Trump-Musk Fallout

A Bromance Gone Sour

Not long ago, Trump and Musk were practically joined at the hip, sharing stages, trading compliments, and basking in their shared vision of a deregulated, crypto-friendly America.

➡️ Musk, the Tesla and SpaceX czar, was a key player in Trump’s Department of Government Efficiency (DOGE). But the honeymoon ended abruptly when Musk trashed Trump’s “big, beautiful bill,” a sprawling tax-cut and spending package that Musk claimed would balloon the national deficit to unsustainable levels.

Trump didn’t take kindly to the critique, calling Musk “CRAZY” on Truth Social and threatening to yank billions in government contracts from Musk’s empire. Musk fired back on X, suggesting Trump’s election win hinged on his support and even floating the idea of impeachment. Ouch!

The drama, played out across social media, has sent shockwaves through financial markets.

➡️ Tesla’s stock cratered 14.3% on Thursday, shedding $152 billion in market value in a single day, the company’s worst drop ever.
➡️ Crypto markets, already jittery from Trump’s tariff threats and fading hopes of a national Bitcoin reserve, took a nosedive.
➡️ Bitcoin fell about 3% to hover around the $ 103,000 support level. Our analyst predicts a decline below $100,000 if market sentiments fail to stabilize.
➡️ Dogecoin, the meme coin Musk once called “the people’s crypto,” plummeted 10% in a day, extending its weeklong slide to 22%.

The total crypto market cap shrank by nearly $170 billion, according to CoinMarketCap data.

Why Crypto Cares

Cryptocurrencies like Bitcoin and Dogecoin thrive on hype, celebrity endorsements, and promises of deregulation. Musk’s long-standing love affair with Dogecoin has driven its price spikes before; remember when Tesla accepted DOGE for merch in 2022, sending it up 15% in a day? Or when Musk swapped Twitter’s logo for a Shiba Inu, triggering a 30% surge?

Trump’s pro-crypto campaign promises, like making the U.S. the “crypto capital of the planet,” fueled a post-election rally that saw Bitcoin soar past $100,000. But when the two titans clash, the market’s fragile confidence crumbles.

The feud also raises questions about Trump’s crypto agenda. His administration has signaled a lighter regulatory touch, with the Securities and Exchange Commission dropping lawsuits against firms like Coinbase.

Yet, the promised Bitcoin stockpile hasn’t materialized, and Trump’s recent tariff threats—50% on Chinese imports, 34% on others—have spooked investors wary of economic instability.

The Bigger Picture

This isn’t the first time Trump’s policies have stirred crypto markets. His January launch of the $TRUMP meme coin was a wild ride, spiking in value before crashing and burning, costing late investors billions while early backers, including Trump-affiliated creators, pocketed $100 million in fees.

His World Liberty Financial venture, backed by sons Don Jr., Eric, and Barron, aims to be a crypto bank but has drawn fire for potential conflicts of interest. Critics like Rep. Maxine Waters have slammed Trump’s crypto ventures as “self-dealing.”

Musk’s exit from DOGE adds another layer of chaos. The advisory body, tasked with slashing federal spending, was already under fire for transparency issues and falling short of its $175 billion savings goal. Musk’s departure, confirmed by the White House on May 29, came after he called the tax bill a “disgusting abomination.”

The move has dented his influence, but his X platform remains a megaphone for swaying market sentiment.

The Bottom Line

The Trump-Musk fallout is a stress test for a crypto market built on hype and hope. Investors are caught in the crossfire, grappling with a reality where political drama can tank portfolios overnight.

For now, the market’s licking its wounds, waiting for a sign, be it a Fed rate cut, a new crypto policy, or a truce between the two titans.

Until then, buckle up: this soap opera’s far from over!