Cryptocurrency Market Plummets Amidst Musk-Trump Spat
The cryptocurrency market experienced a significant downturn on Thursday, triggered by a public dispute between Tesla CEO Elon Musk and former U.S. President Donald Trump. Bitcoin (BTC) fell by 3%, dragging down major altcoins such as Ethereum (ETH), XRP, and Solana (SOL) in its wake.
- Bitcoin’s Decline: Bitcoin’s 3% drop set the tone for a widespread market correction.
- Altcoins Follow Suit: Ethereum, XRP, and Solana also suffered losses, amplifying the overall market downturn.
- Liquidation Surge: The market volatility resulted in nearly $1 billion in liquidations in the cryptocurrency futures market.
Market Overview
The overall cryptocurrency market capitalization decreased by 6% in the last 24 hours, erasing over $170 billion. Bitcoin, Ethereum, XRP, and Solana led the decline, falling by 3%, 7%, 5%, and 6%, respectively. Bitcoin briefly dipped below $101,000, while Ethereum plummeted to $2,420.
Data from Coinglass indicates that liquidations in the cryptocurrency futures market surged to $964 million in the past 24 hours. Long liquidations accounted for 90% of this figure, while short liquidations made up the remaining 10%. It’s worth noting that these figures may be underestimated due to reporting delays from exchanges.
The Musk-Trump Clash
The market downturn coincided with a heated exchange between Elon Musk and Donald Trump regarding the “One Big, Beautiful Bill Act” (OBBBA). This bill seeks to make permanent the tax cuts from the 2017 Tax Cuts and Jobs Act (TCJA), which Trump signed into law. It also includes a $4 trillion increase in the U.S. debt ceiling.
Musk publicly criticized the bill on social media, labeling it a “Great Ugly Spending Bill.” He argued that the bill would increase the government deficit by $2.5 trillion and that Trump’s policies would likely trigger a recession in the second half of 2025.
“This bill is a disaster for the country. We need fiscal responsibility, not more reckless spending.” – Elon Musk
Trump dismissed Musk’s criticism, suggesting it was motivated by the bill’s elimination of tax credits for electric vehicles (EVs). He stated that ending government subsidies and contracts for Musk would be an easy way to save money.
“The easiest way to save money in our budget, billions and billions of dollars, is to end Elon’s government subsidies and contracts.” – Donald Trump
Musk refuted these claims, pointing to instances where he had advocated for cutting tax subsidies for EVs.
Background
Musk was a prominent supporter of Trump during his 2024 presidential campaign. Following Trump’s inauguration, Musk was appointed to lead the Department of Government Efficiency (DOGE) to help reduce government waste and spending. However, Musk resigned from the agency last week.
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