The political discord between President Donald Trump and Elon Musk may have set the stage for Bitcoin's next breakout. While both once shared anti-establishment views, their recent split over spending, cryptocurrency, and control of the narrative is reshaping the market and Bitcoin is likely to benefit.
Bitcoin Strongly Developing After Trump – Musk Collapse
As of this writing, Bitcoin is trading at $108,728, up 0.33% in the past 24 hours. This pioneering cryptocurrency continues to show strength, although it seems that the upside potential is stagnating.
One of the catalysts is Elon Musk, who has initiated his own political movement, the U.S. Party. This political vehicle focuses on cutting spending, reforming fintech, and notably, full support for Bitcoin.
Musk's assertion that the U.S. Party will adopt Bitcoin as a reserve currency is a fundamental move benefiting this pioneering cryptocurrency despite Trump's backlash.
The U.S. President considers any moves related to this issue as a betrayal and threatens to halt contracts or agreements with Tesla and SpaceX in retaliation.
The way the new party incorporates Bitcoin into its platform is unique. Musk has long been inconsistent about cryptocurrency, but this marks an official political commitment.
The symbolic clash between Trump and Musk is also fracturing traditional Republican relationships, with some support shifting towards Musk's movement.
If this party gains even modest support in Congress, pro-Bitcoin legislation could be expedited.
Investors are viewing the discord between Trump and Musk not as a partisan dispute but as a geopolitical shock, and that is significant.
While Trump recently signed into law "A Beautiful Big Bill" worth trillions of dollars, raising the debt ceiling and locking in tax cuts, Musk opposed this measure.
The tech billionaire has called for financial restraint, but this disagreement has ignited a deeper rift.
However, the market has a different view as Bitcoin rises 4.8%, surpassing $109,000 and marking the strongest weekly close ever.
Analysts now see greater upside potential for Bitcoin, a rally driven more by macro conditions and historical data than by politics.
This goal comes after Reuters reported on a research note from Bitwise on July 2 indicating that Bitcoin prices tend to spike 30% in the 50 days following a geopolitical shock.
Analysts André Dragosch and Ayush Tripathi of Bitwise wrote that: "These favorable dynamics create a constructive backdrop for Bitcoin and cryptocurrency assets..."
Implication? Bitcoin could rise to $136,000 by mid-August if historical trends repeat.
Bitcoin Will Benefit From the Depreciation of the USD
Meanwhile, the financial backdrop continues to reinforce Bitcoin's core. Trump's bill is estimated to add $7 trillion to national debt over the next decade. That spending has raised fears about dollar depreciation, a theme that Bitcoin thrives on.
Analysts David Brickell and Chris Mills wrote in their weekly newsletter Connecting The Dots that: "Currency devaluation games have just reached a new level."
Economist Erkan Öz provided additional context on YouTube, comparing Musk's capitalist persona with the decentralized nature of Bitcoin.
"In Bitcoin... there is no 'boss' like Musk. Satoshi Nakamoto... has no authority like a CEO," he said.
Öz argues that while Musk is trying to reshape the system, Bitcoin has been operating outside of that system and may ultimately benefit more from this conflict than either.
Traders seem to maintain their stance. Bitcoin is consolidating above $107,000, with selling pressure gradually decreasing and institutions showing renewed interest.
Yuma commented: "Strong investors entering at prices below $95,000 are not backing down, indicating stable interest."
However, risks remain. Regulatory opposition is a looming threat, especially if Musk's political ambitions provoke retaliation from federal agencies.
However, currently, this discord has amplified the cryptocurrency narrative and reinforced Bitcoin's role in the changing political economy of the U.S.