The recent public fallout between U.S. President Donald Trump and Elon Musk triggered short-term volatility in both stock and crypto markets. While the feud began days after Musk concluded his advisory role at the Department of Government Efficiency (DOGE), the political dispute escalated quickly through social media, with both figures making sharp personal and policy-related accusations.
Tesla stock dropped over 14% following the exchange. Bitcoin briefly fell below $101,000, Ethereum declined to around $2,400, and Dogecoin dipped under $0.17. However, the crypto showed signs of recovery the following day, stabilizing as market activity normalized.
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Public Statements and Market Impact
The disagreement emerged after Musk criticized Trump’s proposed “One Big Beautiful Bill”, claiming it would increase federal costs. He also suggested that Trump was referenced in unreleased Epstein-related files, adding to the intensity of the dispute.
In response, Trump suggested that Musk “went crazy” after the administration ended the EV mandate. Trump also proposed terminating federal contracts and subsidies linked to Musk’s companies, framing it as a cost-saving measure.
These comments contributed to a selloff in Tesla shares, which led to broader reactions in equity markets. In parallel, over $1 billion in crypto liquidations occurred, mostly involving long positions. Despite the sharp drop, digital assets began to stabilize within 24 hours.
Crypto Markets Separate From Political Influence
Despite Dogecoin’s historical association with Musk, the recent events did not trigger a sustained selloff. The DOGE token, while initially affected, is not structurally tied to any political initiative or department, including Musk’s former government unit. The Department of Government Efficiency (DOGE) operated independently of the Dogecoin project.
The broader cryptocurrency market showed resilience after the initial impact. While price dips followed the political exchange, on-chain data and ETF flows suggested that sentiment recovered quickly. Institutional activity remained relatively steady, and no major regulatory shifts accompanied the feud.
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Short-Term Volatility
The decline in crypto prices appeared to be partly correlated with broader equity market moves. As Tesla and some other stocks declined, digital assets briefly followed. However, the bounce in Bitcoin and other tokens indicates that the correlation was temporary – especially since TSLA stocks did not recover as much.
What’s more important, there are currently no indications that the dispute between Musk and Trump will affect the U.S. crypto policy direction. Both individuals have expressed support for crypto over the past years, and their disagreement appears to be centered on fiscal and political issues rather than digital asset regulation.
Outlook Remains Cautious but Stable
While the political dispute between two high-profile figures triggered sharp reactions across several asset classes, the crypto market showed relative independence in the aftermath. Though if additional headlines or policy shifts come out, short-term volatility could return.
For now, digital assets appear to have weathered the incident without longer-term disruption. Crypto pricing remains largely driven by structural factors such as adoption, liquidity, and regulation, rather than the personal dynamics of political or business leaders.
