Almost $1 billion in liquidations occurred as Bitcoin rebounds from a $100,000 decline amid the separation of Elon Musk and Donald Trump.

Bitcoin momentarily fell to $100,000 before quickly bouncing back to $103,000 during the early trading hours on Friday, as the markets responded to a dramatic social media dispute between U.S. President Donald Trump and Tesla CEO Elon Musk.

The altercation, taking place in real time on Truth Social and X, featured Trump’s threat to withdraw federal contracts and subsidies from Musk’s enterprises, alongside Musk’s sharp criticism of Trump’s economic policies.

This political clash triggered a widespread selloff across various assets, erasing $150 billion from Tesla’s market capitalization and resulting in nearly $308 million in Bitcoin long liquidations.

Tensions had been escalating for several weeks. On June 3, Musk openly criticized Trump’s domestic spending bill, labeling it a “disgusting abomination” on X, which marked a shift from earlier policy critiques.

Musk and Trump get personal

Trump retaliated on Truth Social, pledging to “terminate Elon’s Governmental Subsidies and Contracts” and branding Musk as “crazy.” Musk countered by claiming that Trump’s chances of winning the 2024 election depended on his support, advocating for Trump’s impeachment and replacement with JD Vance. This late-night social media confrontation fractured their previously strong partnership, which had fostered optimism within the crypto community.

Trump dismissed Musk’s influence as having “worn thin,” indicating a significant shift from their earlier strategic alliance that began during the 2024 campaign and extended into Musk’s now-completed role leading the Department of Government Efficiency (DOGE).

The dispute took a more personal turn later that evening. Musk accused Trump of failing to uphold key campaign promises and asserted, “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 truth will come out.”

Although Musk did not provide any evidence, his comments accelerated the deterioration of their relationship, which was publicly acknowledged when Trump remarked, “I don’t know if we will [have a relationship] anymore.”

The escalation coincided with a significant downturn in risk assets, causing Bitcoin to drop to $100,400 by 22:00 GMT on June 5 before recovering above $103,000 by early morning.

Bitcoin dips to $100k (Source: TradingView)

Tesla’s 14% decline reflected market apprehensions regarding Trump’s explicit threats to the company’s government-related revenue sources.

SpaceX, which holds multi-billion-dollar contracts with NASA, also emerged as a potential target, although no immediate terminations have been confirmed.

Market observers remain vigilant to see if Trump’s comments lead to formal procurement actions or remain merely rhetorical. Musk’s statement about possibly decommissioning SpaceX’s Dragon program further heightened concerns, although operational continuity clauses in NASA agreements make such actions unlikely without extended negotiations.

Bitcoin whipsaws amid Musk, Trump ‘divorce’

Bitcoin’s sharp decline, followed by a swift recovery, illustrates investor sensitivity to political volatility at six-figure valuations. According to CoinGlass, $873 million in long positions were liquidated within hours, although no systemic on-chain stress has been recorded thus far.

Metrics such as hash rate and exchange reserves remain stable, indicating that the selloff was driven by sentiment rather than fundamental factors. Data from CryptoSlate confirms that while the drawdown reached 4.8% overnight, the psychological $100,000 level attracted significant dip-buying interest, highlighting its role as perceived support despite thin liquidity.

The broader cryptocurrency market now faces a revised regulatory landscape. Once a prominent advocate for deregulation and Bitcoin adoption at the federal level, Musk now finds himself outside Trump’s sphere of influence.

The dissolution of this alliance creates uncertainty regarding how Trump’s administration will approach cryptocurrency policy for the remainder of 2025. As tracked by CryptoSlate, Trump’s shift toward targeted economic retaliation signifies a notable change in the administration’s stance toward the tech sector.

Traders are now left to ponder whether political figures present greater volatility risks than macroeconomic indicators or halving cycles.

While Musk has cautioned that Trump’s tariff expansions could trigger a U.S. recession in the latter half of the year, the market is focused on whether Bitcoin can maintain its position above the six-digit threshold under such unpredictable circumstances.

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