Donald Trump and Elon Musk’s recent rivalry has fueled record controversy in the crypto community. Over $1 billion in long positions were erased within 24 hours that targeted top cryptocurrencies like Xbit and Bitcoin. Social media hyped arguments that drove the spectacular market rise were highlighted by the mercurial intersection of politics and crypto.
Musk Slams Trump’s Budget Policy
The battle peaked when Musk publicly criticized Trump’s “One Big Beautiful Bill,” an independent budget plan. Musk labeled the bill “a huge, outrageous, pork-laden abomination,” claiming it would prolong the national deficit. The bill, to inject economic activity with tax credits and additional spending, will add yet another $2.4 trillion to the deficit over the decade, the Congressional Budget Office says.
The criticism is from Musk because of his belief that the bill goes against previous fiscal reforms in which he himself was a vocal advocate. Musk was concerned that the bill reversed the $180 billion saved by the Department of Government Efficiency (D.O.G.E.), a reform on which Musk had invested.
Crypto Market Volatility and Liquidations
With the increased competition, the crypto market reacted aggressively. Coinglass data reported more than $988 million of leveraged positions unwound in one day, and the most affected were Bitmex and Binance.
Bitcoin fell below $101,000, and Dogecoin fell by nearly 10%. The fall demonstrated how fragile the crypto market is, where soap operas in the world of politics can earn dollar outcomes in a blink of an eye.
In response to the beef, the market struck back by creating a new memecoin named KILL BIG BEAUTIFUL BILL (KBBB) that reached a market capitalization of more than $53 million in a few no-time instants. This shows how political rhetoric can pump cryptocurrency assets speculatively, especially on decentralized exchanges.
More Significant Impacts on Investors
The Musk-Trump war backlash identifies a new trend where political events end up in crypto markets. Investors can observe that prices of memecoins are extremely sensitive to social media events and scandals involving politicians. That volatility is, therefore, yet another risk for participants in the market.
Musk’s accusation of Trump’s connection with Jeffrey Epstein, added further to the divide. The accusations and Trump’s accusation against Musk of motives in the electric vehicle subsidy case have steadied equity and crypto markets.
