Crypto Market Takes a $1B Hit as Trump and Musk Clash Goes Nuclear

06. Jun 2025 Posted by Laurent C. on News

The cryptocurrency world is facing a sharp downturn as the high-profile clash between former U.S. President Donald Trump and Tesla CEO Elon Musk sends shockwaves through the market. Within 24 hours, liquidations have soared to nearly $1 billion, rattling investors and dragging down most major tokens.

Market in Turmoil as Trump-Musk Rivalry Heats Up

What began as Elon Musk’s outspoken condemnation of a recent federal spending bill has snowballed into a public war of words. Labeling the bill “a disgusting abomination,” Musk lashed out at Congress and those who supported it. Trump fired back with accusations that Musk suffers from “Trump Derangement Syndrome” and threatened to strip government support from Musk’s ventures, including SpaceX and Tesla.

The drama, unfolding largely on X (formerly Twitter), has introduced an unsettling mix of political uncertainty and personal animosity into an already fragile crypto landscape.

Crypto Bloodbath: Dogecoin, Ethereum Among Biggest Losers

The impact was swift and severe. Over the past day, seven out of the top ten cryptocurrencies posted losses, dragging the total market capitalization down by 5.2%.

  • Dogecoin (DOGE), long associated with Musk, took the hardest hit, plunging 8.1%.

  • Ethereum (ETH) followed with a 6.8% loss.

  • Bitcoin (BTC) slid 2.6%, slipping below the $104,000 mark.

  • Even Trump’s own meme coin, Official Trump (TRUMP), crumbled 10.9% amid the turbulence.

This cascade of losses triggered a liquidation wave, with $988 million wiped out as leveraged positions unraveled. Data from Coinglass indicates that over 228,000 traders were liquidated in just one day.

Longs Get Crushed as Institutions Turn Bearish

The sell-off wasn’t evenly distributed. Long positions accounted for $888.7 million of the total liquidations, a staggering contrast to the $99.3 million from shorts. Bitcoin led the pain parade with $308 million in long liquidations, while Ethereum saw $260 million flushed.

Adding to the gloom, the Coinbase Prime Index, a barometer for U.S. institutional sentiment, turned negative. Analysts see this shift as a sign that major players are pulling back—some even believe the feud itself may be staged.

“It’s insane, but this could be a setup,” a skeptical trader suggested. “Trump and Musk could be faking the beef to tank the market and scoop assets at a discount.”

Could Bitcoin Bounce Back?

While the short-term sentiment is clearly bearish, some believe this chaos could pave the way for a Bitcoin resurgence. Musk has warned that Trump’s trade policies, especially tariffs, could plunge the U.S. into recession by late 2025.

“The Trump tariffs will cause a recession in the second half of this year,” Musk claimed.

That warning aligns with broader investor anxiety, but others are framing this moment as a bullish signal for crypto.

“If Trump and Musk split for good, expect the Fed and Treasury to start printing like mad,” one user posted. “That’s when Bitcoin will explode.”

As the dust settles, traders will be watching closely—not just the charts, but the headlines. In the volatile intersection of politics, personality, and finance, even a tweet can trigger a billion-dollar swing.