Musk vs Trump: Why Did Bitcoin Fall… And Will It Fall Further?

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Connor Sephton

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Connor Sephton

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Connor Sephton is a journalist based in London, who also works for Sky News and the BBC as a radio newsreader and online reporter. He has covered crypto since 2018 — reporting from major conferences...

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Elena is the Features Lead at Cryptonews.com. With a Master's degree in science journalism from City University, London, she is passionate about exploring complex topics in the world of technology.

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June 6, 2025

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It’s been described as an “inevitable” fallout — but that doesn’t make the public row between Elon Musk and Donald Trump any less shocking.

Much of the disagreement relates to the president’s “Big Beautiful Bill,” which the world’s richest man has called a “disgusting abomination.”

Musk argues that these huge tax breaks would undo a lot of his work at the Department of Government Efficiency, where he slashed federal spending.

Trump added fuel to the fire by suggesting that the Tesla and X CEO knew “every aspect” of his proposals — a claim that was later dismissed as “false.”

What followed next was an extraordinary barb of missives. Musk accused Trump of “ingratitude” — and insisted the president would have lost the election without him.

He predicted that tariffs will spark a recession in the second half of this year, asked followers whether a new political party should be established, and alleged that Trump is named in the Epstein Files.

The president immediately swung back by declaring the easiest way to save “billions and billions of dollars is to terminate Elon’s governmental subsidies and contracts.”

That led Musk to float the idea of decommissioning a SpaceX vessel relied on by NASA, and sharing an X post calling for Trump to be impeached and replaced by his Vice President JD Vance.

This childish fit of pique between two of the world’s most powerful men was unfolding right in the middle of the trading day. Tesla’s share price dumped by 14% on Thursday — $152 billion of value gone in the blink of an eye.

And as you might expect, this ended up weighing heavily on Bitcoin too. But while the world’s biggest cryptocurrency was dragged further away from all-time highs set two weeks ago, it did manage to stay above $100,000.

What Happens Next?

There are signs that the heavy-handed rhetoric on both sides is beginning to cool down — even as countless “influencers” on X were forced into the uncomfortable position of deciding which billionaire to back.

Hedge fund manager Bill Ackman urged the pair to “make peace for the benefit of our great country,” adding: “We are much stronger together than apart.”

“You’re not wrong,” Musk replied.

And after being urged by a small, anonymous account to “cool off and take a step back for a couple of days,” the entrepreneur confirmed that the Dragon spacecraft isn’t going to be decommissioned for now.

But there is confusion over whether Musk and Trump are now going to kiss and make up. Reports from one White House official had suggested both men were planning to take part in a phone call at some point on Friday — but Reuters later reported that the president was not interested.

Bitcoin has rebounded slightly now the war of words on social media has subsided. However, this is yet another powerful illustration of how unpredictable this presidency is — and how no bull run is guaranteed. A resumption or escalation in attacks could easily drag BTC below $100,000.

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At this point though, it’s worth reflecting on the “Big Beautiful Bill” that’s at the center of this row.

The Washington Post has said Trump’s policies would add “trillions of dollars to the soaring national debt,” which now stands at $36.9 trillion. Analysis from the Congressional Budget Office says these tax breaks alone would blow a $2.4 trillion black hole into the country’s finances.

BlackRock’s Larry Fink has warned the U.S. economy needs to grow by at least 3% a year or “we’re going to hit the wall,” with Citadel’s Ken Griffin arguing that America’s current deficits are “fiscally irresponsible.”

Short term, all of this uncertainty could be bad news for the crypto markets — but longer term, supporters argue it will be good news for Bitcoin… and underline why this digital asset was created in the first place.

BTC’s fixed supply of 21 million, and the lack of a central bank that can print money and dilute what’s already in circulation, has long been described as an antidote to fiat currencies.

Coinbase CEO Brian Armstrong pointed to this in a recent post on X, writing:

“If the electorate doesn’t hold Congress accountable to reducing the deficit, and start paying down the debt, Bitcoin is going to take over as reserve currency. I love Bitcoin, but a strong America is also super important for the world. We need to get our finances under control.”