How quickly can a billionaire bromance turn into a billion-dollar market meltdown? Just ask the crypto market, which witnessed an $800 million liquidation event following the explosive public feud between former President Donald Trump and tech mogul Elon Musk on June 5, 2025.
When billionaire egos collide, crypto markets crumble—$800 million liquidated overnight as the Trump-Musk alliance implodes.
The duo’s relationship, once the stuff of political fairytales, began unraveling when Musk publicly criticized Trump’s budget bill as a “disgusting abomination.”
This spark ignited a full-blown social media war, with Trump threatening to cancel Musk’s lucrative government contracts and Musk claiming Trump couldn’t have won the presidency without his support.
Things escalated when Musk briefly threatened to shut down a SpaceX program that NASA relies on for astronaut transport – effectively holding America’s space program hostage in a Twitter tantrum.
He even appeared to endorse a post calling for Trump’s impeachment and made accusations about Trump being “in the Epstein files.” The bitter exchange marked a stunning reversal from Musk’s earlier statement that he loved Trump as much as a straight man can love another man.
The catalyst? Trump’s budget bill, which reportedly ends tax credits for electric vehicles – a direct hit to Musk’s Tesla empire.
With billions in government contracts now hanging in the balance, Musk warned Republican lawmakers that “Trump has 3.5 years left as President, but I will be around for 40+ years.”
The feud played out publicly across X and Truth Social platforms, giving millions of followers a front-row seat to the political drama.
Talk about playing the long game!
For crypto markets, this political soap opera triggered a domino effect of selling.
Think of it as financial musical chairs.
When the music of political stability stops, traders rush to secure positions, and not everyone finds a seat.
Bitcoin prices dropped sharply while altcoins experienced even steeper declines. The crypto market was already showing signs of vulnerability with Bitcoin recently experiencing a 10% drop to $82K before the Trump-Musk confrontation.
The $800 million liquidation tsunami demonstrates how sensitive crypto markets remain to political developments.
Institutional investors reduced exposure amid the uncertainty, while algorithmic trading systems amplified the selling pressure – like pouring digital gasoline on an already blazing financial fire.
This isn’t Musk’s first rodeo influencing crypto prices.
His previous tweets have moved markets, particularly Dogecoin – ironically sharing an acronym with his now-abandoned Department of Government Efficiency position.
