Trump-Musk Clash Sparks Bitcoin Price Drop
A recent public showdown between US President Donald Trump and tech billionaire Elon Musk has triggered a sharp decline in Bitcoin’s value. Over the last 24 hours, Bitcoin’s price fell nearly 3%, slipping from just over $105,900 to around $100,500 before settling near $103,000. This sudden tumble caught many investors off guard, especially those who had bet that Bitcoin’s price would rise.
The phrase “when elephants fight, the grass suffers” fits perfectly here — with the heavyweight dispute between Trump and Musk sending shockwaves through the cryptocurrency market, it’s the investors who ended up feeling the pinch.
Image 1: Elon Musk and Donald Trump shaking hands (Source: AFP)
Heavy Losses for Traders Betting on Bitcoin’s Rise
Those who held “long” positions on Bitcoin were hit hard. Many of these investors use borrowed money, or leverage, to amplify their bets. While leverage can boost profits when prices rise, it also magnifies losses when prices fall. Due to the sudden price drop, around $308 million worth of long bets were forcibly closed, or liquidated, as traders could no longer cover their losses.
The liquidation of such a large amount highlights how volatile the market has become in response to the political tensions. The uncertainty caused by the spat has shaken confidence, prompting many to exit their positions quickly.
The Political Fallout Behind the Price Movement
The price fall ties directly to the escalating feud between Trump and Musk. Musk publicly criticised Trump’s proposal to impose sweeping tariffs on imports, warning this policy could trigger a recession in the latter half of the year. In response, Trump threatened to withdraw government contracts and subsidies from Musk’s businesses, including SpaceX and Tesla. Musk then indicated that SpaceX might suspend its government spacecraft operations, causing further unease.
In light of the President’s statement about cancellation of my government contracts, @SpaceX will begin decommissioning its Dragon spacecraft immediately pic.twitter.com/NG9sijjkgW
— Elon Musk (@elonmusk) June 5, 2025
Crypto analyst Pav Hundal, who leads research at the exchange Swyftx, told Cointelegraph that US policy uncertainties, including delayed monetary easing in response to tariff impacts, could slow economic growth and weigh on market sentiment.
This clash between two influential figures stirred concerns among investors, who began to sell off their Bitcoin holdings amid the growing uncertainty. The tension overshadowed what had been a generally positive trend for cryptocurrencies in recent weeks.
Meanwhile, long-term Bitcoin holders who had held their coins since before the recent record highs around $112,000 also started selling to lock in profits. This additional selling pressure contributed to the downward price movement.
Bitcoin wasn’t the only cryptocurrency affected. Other major digital assets such as Ethereum, XRP, and Solana experienced sharp declines over the same period, with Ethereum falling over 7%, and XRP and Solana dropping around 4% to 5%. This indicates that the wider crypto market has been unsettled by the political drama and market volatility.
Image 2: (Source: AFP)
What Liquidations Mean for Investors
Liquidation happens when traders using leverage can no longer meet margin requirements after the price moves against their positions. The forced closure of these bets means investors lose the money they had put in. When liquidations accumulate quickly, it shows the market is in a state of extreme volatility and could be poised for a price reversal.
This wave of liquidations reveals how sensitive crypto markets are to political and economic news. The Trump-Musk spat disrupted what was otherwise a bullish run for Bitcoin, causing many investors to take profits early or cut losses.
Read Also: Elon Musk and Trump Rift Sends Tesla Shares Tumbling Amid Political Firestorm
Thus, the public clash between Trump and Musk has had a clear, immediate impact on Bitcoin and the wider cryptocurrency market. The price drop and the large-scale liquidation of leveraged bets underscore the risks that come with investing in such a volatile asset, especially when major political tensions are involved. Investors should remain cautious and aware that high-profile conflicts can have ripple effects far beyond the public headlines.
