Trump–Musk Feud Triggers $980M Crypto Liquidation, $27B Musk Loss, and Tesla's Largest Stock Plunge

A Political Fallout With Financial Ripples Hits Tesla, Washington, and the Crypto Market

A once-strong alliance between Donald Trump and Elon Musk has rapidly devolved into one of the most politically and financially disruptive feuds of 2025. The fracture became public the week of May 30, when Musk issued a scathing denunciation of Trump’s newly unveiled tax-and-spending bill. Musk, who had co-founded the DOGE (Department of Government Efficiency) task force, accused the legislation of undoing hard-fought savings. 

On June 4, Musk tweeted, “This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination. Shame on those who voted for it: you know you did wrong.” He claimed the bill would raise the national deficit by $2.4 trillion and reverse the DOGE team’s cost-reduction initiatives. 

Trump, taken aback by the public rebuke, responded with visible frustration. “I've always liked Elon. I was very surprised… I'm very disappointed in Elon. I've helped Elon a lot.”

The collapse of their relationship quickly escalated into a headline-dominating spectacle, prompting White House aides to arrange a de-escalation call by June 5. Sources revealed that Trump was urged to soften his tone to avoid jeopardizing Senate support for the bill. 

Still, Trump publicly endorsed the measure, hailing it as “One of the Greatest Bills ever presented to Congress.” Musk continued to oppose it aggressively, describing it as a betrayal of American taxpayers and a threat to fiscal discipline. In response to mounting tensions, Trump publicly threatened to terminate all government contracts and subsidies associated with Musk’s ventures — a figure reportedly worth tens of billions of dollars.

Musk retaliated with an incendiary accusation, tweeting, “Time to drop the really big bomb: @realDonaldTrump is in the Epstein files. That is the real reason they have not been made public.” The explosive allegation pushed the feud into new territory, drawing renewed attention from media and lawmakers alike.

Despite calls for restraint from within Trump’s circle, including requests from aides to tone down the social media warfare, the conflict only deepened. Musk’s supporters argued he was defending principles of fiscal integrity, while Trump allies viewed the attacks as a betrayal from a once-loyal ally.

The public unraveling brought immediate financial consequences. Musk’s personal net worth took a $27 billion hit, dropping to $388 billion. Tesla stock cratered over 14% in a single session, shedding $152 billion in coin market cap — the largest one-day value loss in the company’s history. 

Dennis Dick, a strategist at Stock Trader Network, blamed Musk’s political pivot. “Elon’s politics continue to harm the stock,” he said. “First, he aligned with Trump, which upset many potential Democratic buyers. Now, he has turned on the Trump administration.” As Musk’s sway in Washington diminished, House Speaker Mike Johnson noted that Musk ignored his calls and instead received policy explanations by text. Johnson added that while Musk remains “a friend,” credit for the bill belongs to Trump.

Musk’s standing with Republican lawmakers has deteriorated. Once influential among GOP members skeptical of federal spending, Musk now faces rejection from former allies. Trump loyalists reacted with sharp rebukes. Rep. Troy Nehls of Texas declared, “You’ve lost your damn mind,” while Rep. Tim Burchett of Tennessee accused Musk of “going off the deep end.” House Majority Leader Steve Scalise dismissed Musk’s influence altogether: “He hasn’t moved a vote.” Only a few Republicans—Thomas Massie, Warren Davidson, and David Schweikert—voiced support for Musk, aligning with his concerns over the national debt.

Trump’s threat to revoke federal contracts sparked concern across both business and defense sectors. Musk countered by threatening to shut down the Dragon spacecraft program if funding were cut. Despite Musk’s assertion that subsidies do not drive his business — “If I cared about subsidies, I would have entered the oil and gas industry” — estimates place total federal support for his companies at over $38 billion, excluding classified defense deals. 

This abrupt confrontation over government support also raised questions about the long-term viability of Tesla’s relationship with the federal government, especially as the administration weighs critical infrastructure and defense contracts.

The geopolitical undercurrents of the feud add another layer of complexity. Musk has long opposed Trump’s tariff stance on China, a country central to Tesla’s global operations. Over 3 million Tesla vehicles have rolled off its Shanghai assembly lines, generating significant revenue. 

Back in April, Musk privately advised Trump to ease tariffs on Chinese imports. The proposed federal bill also includes provisions to eliminate EV tax credits, which remain critical for Tesla's domestic sales. Amid this backdrop, Musk’s perceived foreign allegiances likely played a role in the White House’s quiet removal of Jared Isaacman, a Musk ally, from consideration for a top NASA post.

The ripple effects of this public clash extended well into financial markets, particularly digital assets. The Trump–Musk turmoil coincided with a staggering $980 million in crypto market liquidations, as risk assets came under heavy pressure. 

Bitcoin shed to around $101,000 before hovering near $103,700, while Ethereum tumbled over 4% to $2,480. Dogecoin and Cardano each dropped over 4%, to $0.17 and $0.64 respectively. Other losses included XRP slipping to $2.15, Solana trading down to $148, and BNB falling to $645. Analysts cited a convergence of Musk’s inflammatory commentary, Trump’s tariff rhetoric, and broader macroeconomic anxiety as catalysts behind the market’s swift unraveling.

The crypto price index reflected the volatility with stark precision, illustrating how sensitive digital asset valuations remain to public sentiment and political theatrics. Analysts stressed that while long-term prospects for crypto assets are “cautiously optimistic,” this episode offered a blunt reminder about the dangers of overleveraging and herd behavior during politically charged news cycles. The fallout marks not just a political spectacle, but a real-time stress test for investors, policymakers, and anyone watching the coin market cap fluctuate on the edge of a tweet.

This article has been refined and enhanced by ChatGPT.