Musk and Trump: Factors Behind Bitcoin’s Decline and Potential for Further Decrease

This situation has been labeled as an “inevitable” consequence — yet the public dispute between Elon Musk and Donald Trump remains startling.

A significant portion of the contention revolves around the president’s “Big Beautiful Bill,” which the wealthiest individual in the world has denounced as a “disgusting abomination.”

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— Elon Musk (@elonmusk) June 5, 2025

Musk contends that these substantial tax incentives would reverse much of his efforts at the Department of Government Efficiency, where he reduced federal expenditures.

Trump intensified the conflict by asserting that the Tesla and X CEO was aware of “every aspect” of his proposals — a statement that was subsequently labeled as “false.”

What ensued was an extraordinary exchange of messages. Musk accused Trump of “ingratitude” — asserting that the president would have lost the election without his support.

He forecasted that tariffs would trigger a recession in the latter half of this year, inquired whether a new political party should be formed, and claimed that Trump is mentioned in the Epstein Files.

The president quickly retaliated by stating that the simplest method to save “billions and billions of dollars is to terminate Elon’s governmental subsidies and contracts.”

This prompted Musk to propose the decommissioning of a SpaceX vessel utilized by NASA, and to share an X post advocating for Trump’s impeachment and replacement by his Vice President JD Vance.

This juvenile outburst between two of the globe’s most influential figures unfolded during trading hours. Tesla’s stock plummeted by 14% on Thursday — resulting in a loss of $152 billion in value almost instantaneously.

As anticipated, this had a significant impact on Bitcoin as well. While the leading cryptocurrency was pushed further away from the all-time highs achieved two weeks prior, it managed to remain above $100,000.

What Happens Next?

There are indications that the intense rhetoric from both parties is starting to ease — even as numerous “influencers” on X found themselves in the awkward position of choosing which billionaire to support.

Hedge fund manager Bill Ackman urged the two to “make peace for the benefit of our great country,” adding: “We are much stronger together than apart.”

“You’re not wrong,” Musk responded.

After being encouraged by a small, anonymous account to “cool off and take a step back for a couple of days,” the entrepreneur confirmed that the Dragon spacecraft will not be decommissioned at this time.

However, there is uncertainty regarding whether Musk and Trump will reconcile. Reports from a White House official suggested that both individuals were planning to engage in a phone call at some point on Friday — but Reuters later indicated that the president was not interested.

Bitcoin has seen a slight recovery now that the verbal exchanges on social media have diminished. Nevertheless, this serves as yet another potent reminder of the unpredictability of this presidency — and that no bull run is assured. A resumption or escalation of hostilities could easily push BTC below $100,000.

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At this juncture, it is pertinent to reflect on the “Big Beautiful Bill” that lies at the heart of this dispute.

The Washington Post has reported that Trump’s policies would contribute “trillions of dollars to the soaring national debt,” which currently stands at $36.9 trillion. Analysis from the Congressional Budget Office indicates that these tax breaks alone would create a $2.4 trillion deficit in the nation’s finances.

BlackRock’s Larry Fink has cautioned that the U.S. economy must grow by at least 3% annually or “we’re going to hit the wall,” while Citadel’s Ken Griffin has described America’s current deficits as “fiscally irresponsible.”

In the short term, all this uncertainty could spell trouble for the crypto markets — but in the long run, proponents argue it will bode well for Bitcoin… and emphasize the reasons for which this digital asset was created in the first place.

BTC’s capped supply of 21 million, along with the absence of a central bank that can print money and dilute existing circulation, has long been viewed as a remedy to fiat currencies.

Coinbase CEO Brian Armstrong highlighted this in a recent post on X, stating:

“If the electorate doesn’t hold Congress accountable to reducing the deficit, and start paying down the debt, Bitcoin is going to take over as reserve currency. I love Bitcoin, but a strong America is also super important for the world. We need to get our finances under control.”

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