The cryptocurrency market is reeling from the escalating public feud between US President Donald Trump and Tesla CEO Elon Musk. Total liquidations have surged in the past 24 hours, nearing $1 billion.
Furthermore, the overall market capitalization has dropped, with seven of the top 10 cryptocurrencies posting losses today.
How Did The Trump-Musk Feud Impact the Crypto Market?
Tensions between Trump and Musk erupted over the latter’s criticism of the President’s tax and spending bill.
“This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination. Shame on those who voted for it: you know you did wrong. You know it,” Musk posted on X.
The feud escalated as Trump dismissed Musk’s criticisms, accusing him of suffering from “Trump Derangement Syndrome.” Trump also threatened to revoke government subsidies and contracts for Musk’s businesses.
The dispute, which is playing out publicly on X, has introduced unpredictable variables into the market, including personal scandals and policy disagreements.
Furthermore, it has also rattled investor confidence, with the market facing significant downward pressure. BeInCrypto data showed that over the past 24 hours, the total crypto market capitalization fell 5.1%.
Seven of the top ten coins have depreciated over the past day. Musk’s favorite, Dogecoin (DOGE), saw the sharpest fall of 7.9%, followed by Ethereum’s (ETH) 6.6% decline.
Bitcoin (BTC) dipped 2.4% and fell below the $105,000 mark. The President’s meme coin was also negatively impacted. According to the latest data, Official Trump (TRUMP) was down 10.8%.
Top 10 Cryptocurrencies Performance. Source: BeInCrypto
This price drop triggered a wave of liquidations, as many leveraged positions were forced to close, amplifying volatility. According to Coinglass data, over the past 24 hours, total liquidations reached $988.09 million.
228,646 traders were liquidated during this period, highlighting the scale of the market’s reaction. Bitcoin bore the brunt of the sell-off, with liquidations amounting to $308.1 million for long positions and $33.8 million for shorts. Ethereum followed closely, recording $260.1 million in long liquidations and $26.3 million in shorts.
Long positions accounted for $888.7 million of the total liquidations, while short positions contributed $99.3 million, reflecting the intensity of the risk-off sentiment.
Crypto Market Liquidations. Source: Coinglass
That’s not all. The Bitcoin Coinbase Prime Index, a key indicator of US institutional investor sentiment, also turned negative.
‘The Coinbase Prime Index just flipped negative, showing that US institutional investors and whales suddenly turned bearish. Let’s see how this plays out in the short term, but there’s a new narrative unfolding right now, just as the “Trade War” theme was starting to lose its impact,” an analyst wrote.
Meanwhile, some even suspect the feud is part of a larger plan to manipulate markets.
“Elon Musk and Donald Trump have created a fake ‘beef’ to push the markets lower. This is manipulation of the highest order. It’s insane to think they would do this,” a market watcher stated.
Will Bitcoin Benefit from the Trump-Musk Fallout?
Beyond the short-term volatility, the fallout has raised concerns about longer-term economic impacts. Musk has publicly warned of a potential US recession in the second half of 2025, attributing it to Trump’s tariff policies.
“The Trump tariffs will cause a recession in the second half of this year,” the post read.
This warning aligns with broader market fears, as Trump’s trade policies have already contributed to market instability earlier this year. Despite this, some speculate that the breakdown in the Trump-Musk relationship could benefit Bitcoin.
“The downfall of Elon Musk and Trump’s relationship will be marked by the printing of money like we’ve never seen before. Bitcoin is going to fkn explode. Brace yourself,” a user claimed.
Kashif Raza, Founder of Bitinning, also explained that the dispute could have several implications for Bitcoin. His post explored various scenarios, such as Trump imposing sanctions or removing subsidies from Musk’s companies, Musk potentially being deported, or Musk opting for Bitcoin to bypass restrictions. It also considers the possibility of Musk accepting Bitcoin donations if he runs for office.
“In all possible scenarios, Bitcoin is winning because censorship resistance is one of its strong features,” Raza noted.
While it’s uncertain whether these scenarios will materialize, one thing is for sure: As the Trump-Musk feud continues, its ripple effects will likely keep the crypto market on edge.
