I. Core Events and Direct Impacts
Dogecoin price plummets
Single-day drop of 10%: On June 6 (Thursday), due to the escalation of the conflict between Musk and Trump, Dogecoin's price dropped by 10% in a single day.
Weekly cumulative drop of 22%: In the past week, Dogecoin's market value has evaporated by nearly a quarter, with the conflict being a key trigger.
Direct Relevance: Musk is seen as the 'spokesperson' for Dogecoin, and fluctuations in his political stance directly impact market confidence. For example:
After Tesla accepted Dogecoin payments in 2022, its single-day increase exceeded 15%;
In 2023, Twitter (now X) changed the Dogecoin logo, leading to a single-day price surge of 30%.
Tesla's stock price was also adversely affected.
The conflict caused Tesla's stock price to plummet by 14.26% in a single day, with a market value evaporating by approximately 1.09 trillion yuan, reflecting investor concerns about the stability of Musk's enterprises.
II. Background of the Conflict and Market Transmission Mechanism
Trigger: Policy differences and personal grievances
Policy Contradictions: Musk opposes Trump's tariff policies and the 'too big to fail' bill (expected to increase federal debt by $2.5 trillion), believing it hinders corporate supply chains (such as Tesla's reliance on materials from China and Mexico).
Public Mutual Attacks:
Trump calls Musk 'mentally unstable' and threatens to cancel his government contracts;
Musk retaliates by threatening to retire the SpaceX 'Dragon' spacecraft (a space transport tool relied upon by NASA), which later eased but still triggered market panic.
Market Sensitivity: Musk's Influence on Cryptocurrency
Speech-driven volatility: Musk has previously directly influenced Dogecoin prices through social media and business decisions (such as Tesla accepting payments and Twitter promotions).
Political Association Risks: Musk previously led the 'Government Efficiency Office' (DOGE project) during the Trump administration, and his exit has intensified expectations of policy uncertainty.
III. Potential Impacts on Other Cryptocurrencies
Mainstream cryptocurrencies such as Bitcoin have not shown significant volatility yet.
This conflict did not mention Bitcoin, and its market impact is temporarily limited to Dogecoin. However, if the conflict escalates to regulatory policy levels (e.g., Trump pushing for strict cryptocurrency regulation), it could affect the overall market.
Changes in industry regulatory expectations
Musk has long advocated for 'moderate regulation' to balance innovation and investor protection, while Trump, if re-elected, may adjust cryptocurrency policies. Their opposition could amplify policy uncertainty and suppress market risk appetite.
IV. Historical Comparisons and Future Risks
Short-term volatility vs Long-term trends:
Similar to the reverse case in 2024 when Musk supported Trump leading to a rise in Dogecoin, this conflict validates the 'double-edged sword' effect of his statements on cryptocurrency prices.
Ongoing Risk Points:
If political conflicts persist (such as contract cancellations or adjustments in SpaceX operations), it may further undermine market confidence in Musk-related assets, triggering a chain sell-off of cryptocurrencies and Tesla stocks.
Summary: Impact Pathways and Investor Focus Points
Impact Dimensions: Specific Manifestations: Future Risks
Dogecoin price: Short-term drop of 10%, weekly drop of 22%, possible weakening of Musk's political influence or change in rhetoric.
Tesla and Related Stocks: Market value evaporated by 1.09 trillion yuan in a single day due to government contract cancellations and supply chain policy adjustments.
Cryptocurrency market sentiment: Panic spreads to meme coins due to Trump's potential strict regulatory policy implementation.
Investors are advised to closely monitor the subsequent interactions and policy trends of the two (such as Trump's campaign statements and Musk's social media posts). If the conflict continues, it will exacerbate volatility in the cryptocurrency market. History shows that Musk's personal influence remains a significant 'weather vane' for assets like Dogecoin.
