Dogecoin crashed when Trump threatened to cancel contracts, and Musk responded with a Dragon shutdown.
After Elon Musk officially distanced himself from Donald Trump’s administration and severed ties with the Department of Government Performance, Dogecoin fell by up to 10% today, with its weekly losses now sitting at 22%, known by its sarcastic acronym, DOGE.
This incident coincided with a brutal political feud between Elon and the current U.S. president, dragging a once-beloved meme coin through the mud.
The drama began earlier this week when Elon took shots at Trump’s latest spending bill. Trump didn’t stay silent. He retaliated by withdrawing the NASA nomination of Elon’s longtime business ally Jared Isaacman, the person he wanted to lead U.S. space exploration efforts. This withdrawal shattered any illusion of peace between them.
Trump threatened to cancel contracts, Musk responded with a Dragon shutdown.
By Thursday, the fight had turned into a full-blown public war. Trump told the press that he was "very disappointed" in Elon. Within hours, Elon fired back on X, writing, "Trump loses the election without me." Trump’s next response? "Crazy."
He followed up with a threat to cancel Elon’s companies' federal contracts. The market was immediately affected. Tesla shares dropped 14% before the day closed. Elon showed no hesitation.
He wrote on X, "Go ahead, make my day" and then announced that SpaceX would start shutting down its Dragon spacecraft program. Dragon is the only American spacecraft that takes astronauts to and from the International Space Station.
There was no direct mention of Dogecoin, but it didn’t matter. The coin has never been tied to any real-world value or asset. Instead, it runs on vibes, hype, memes, and above all, Elon’s influence. That’s why this political turmoil had a significant impact.
Elon leaving Washington means his influence is waning, and Dogecoin holders are feeling the impact. In 2022, after Tesla began accepting it for trading, Dogecoin saw a 15% increase in a single day.
In 2023, Elon replaced the Twitter logo with Shiba Inu, the Dogecoin mascot, resulting in a price increase of over 30%. Now that Elon is out of Trump’s orbit and the contracts are in jeopardy, the same price is falling.
Back in November, following Trump’s victory, Dogecoin had rallied alongside other coins like Bitcoin, as crypto traders expected a deregulated environment. That hope has now fizzled out. With Elon out and government pressure increasing, buyers are paying the price for betting on their bromance.
The key difference helps wire crypto brands break headlines and dominate.