Dubai: A quiet week for crypto turned chaotic after a high-profile online clash between former US President Donald Trump and Tesla CEO Elon Musk sent shockwaves through the digital asset world.
Bitcoin plunged nearly 4% last Thursday, dipping to $100,500 and wiping out billions in market value within hours. Other major cryptocurrencies followed suit: Dogecoin dropped 10%, Ethereum declined over 7%, and the broader crypto market experienced a staggering $982 million in liquidations.
What Sparked the Turmoil?
The trigger was a heated exchange on social media. Trump criticized Musk’s government contracts, calling him “crazy,” while Musk retaliated by threatening to halt operations of SpaceX’s Dragon spacecraft—the only active US-built vehicle capable of ferrying astronauts to space.
As tensions between the two influential figures escalated, so did investor anxiety. Musk’s warning that Trump’s proposed tariff plans could lead to a recession rattled financial markets and triggered panic selling in crypto.
Bitcoin Holds the Line—Barely
“Bitcoin narrowly stayed above the $100,000 level as the online spat between Elon Musk and President Trump spilled over from traditional markets,” said Simon Peters, crypto analyst at eToro.
At one point, Bitcoin shed more than $5,000 in just a few hours before rebounding to $105,500, aided by rumors of reconciliation and stronger-than-expected US jobs data.
Dogecoin Takes a Heavy Hit
Dogecoin, once dubbed “the people’s crypto” by Musk, took a severe beating—dropping 22% over the week. The decline accelerated after Musk was reportedly removed from Trump’s federal downsizing committee, ironically nicknamed “DOGE.” The token, often buoyed by Musk’s public support, appeared adrift without his backing.
Wider Fallout in the Market
The ripple effects extended beyond the crypto sector. Tesla’s stock dropped 14%, Coinbase fell nearly 5%, and crypto mining firms like Riot and Marathon were also in the red. Meanwhile, stablecoin issuer Circle’s IPO excitement failed to lift sentiment, drawing comparisons to Coinbase’s IPO in 2021, which coincided with a market peak.
More Volatility Ahead
With key US inflation reports (CPI and PPI) due later this week, market participants are bracing for continued turbulence. Long-term holders are cashing out profits, while fresh uncertainties surrounding crypto regulation in a politically divided Washington add another layer of concern.
Bottom Line: Prepare for More Swings
When two of the world’s most influential figures engage in a public feud, markets don’t just observe—they react. In an age where a single tweet can shift trillions, crypto investors would be wise to monitor not just market charts but also the social media feeds that increasingly shape financial sentiment.
