Bitcoin briefly dipped to $100,000 before swiftly rebounding to $103,000 in early trading hours Friday, as markets reacted to an explosive social media fallout between U.S. President Donald Trump and Tesla CEO Elon Musk.
The confrontation, unfolding in real time across Truth Social and X, was marked by Trump’s threat to revoke federal contracts and subsidies to Musk’s companies, and Musk’s own scathing repudiation of Trump’s fiscal policies.
The political confrontation ignited a cross-asset selloff that wiped $150 billion from Tesla’s market cap and prompted nearly $308 million in Bitcoin long liquidations.
Tensions had been simmering for weeks. On June 3, Musk publicly condemned Trump’s domestic spending bill, describing it as a “disgusting abomination” on X, escalating from prior policy critiques.
Trump countered on Truth Social, vowing to “terminate Elon’s Governmental Subsidies and Contracts” and labeling Musk “crazy.” Musk responded by asserting Trump’s 2024 election win relied on his backing, calling for Trump to be impeached and replaced with JD Vance. The late-night social media clash shattered their once-close partnership, which fueled optimism in the crypto space.
Trump dismissed Musk’s influence as having “worn thin,” a notable departure from their once-strategic alliance that began during the 2024 campaign and extended into Musk’s now-concluded tenure leading the Department of Government Efficiency (DOGE).
While Musk did not provide evidence, the remarks accelerated the unraveling of their relationship, which was confirmed publicly when Trump stated, “I don’t know if we will [have a relationship] anymore.”
The escalation coincided with a marked downturn in risk assets, prompting Bitcoin to sink to $100,400 by 22:00 GMT on June 5 before retracing above $103,000 by early morning.
Tesla’s 14% plunge reflected market concerns over Trump’s explicit threats to the company’s government-linked revenue streams.
SpaceX, which holds multi-billion-dollar NASA contracts, also emerged as a potential target, though no immediate terminations have been confirmed.
Market watchers remain alert to whether Trump’s remarks translate into formal procurement action or remain rhetorical. Musk’s declaration that he may decommission SpaceX’s Dragon program further fueled concern, though operational continuity clauses in NASA agreements make such moves unlikely without prolonged negotiations.
Metrics, including hash rate and exchange reserves, remain stable, suggesting the selloff was sentiment-driven rather than fundamental. CryptoSlate data corroborates that while the drawdown reached 4.8% overnight, the psychological $100,000 level attracted strong dip-buying interest, underscoring its role as perceived support despite thin liquidity.
The broader crypto market now faces a recalibrated regulatory outlook. Once a loud and influential voice in favor of deregulation and Bitcoin adoption at the federal level, Musk now stands outside Trump’s circle of influence.
Traders are now left questioning whether political personalities pose greater volatility risks than macro indicators or halving cycles.
