A public fallout between Donald Trump and Elon Musk has rattled financial markets, sending Tesla stock tumbling and dragging the crypto sector into a broad risk-off retreat.
The rift came to a head on June 5 during a White House meeting with the German chancellor, where Trump voiced his displeasure with Musk, who until recently had been one of his closest advisers. “I’m very disappointed in Elon,” Trump said. “I’ve helped Elon a lot.”
Musk wasted no time responding. In a pointed post on X, he accused Trump of ingratitude and fired back, “Without me, Trump would have lost the election.” The exchange marked a dramatic unraveling of their once-powerful alliance, built during Trump’s second term.
Musk Swipe at Trump Adds Fuel to Market Volatility
Tensions escalated further when Musk replied “Yes” to a post on X calling for Trump’s impeachment. The remark drew immediate attention, although any such effort is considered politically impossible, as Republicans currently hold majorities in both chambers of Congress.
Markets quickly reflected the fallout. Bitcoin dipped to $100,783 on Thursday before recovering above $102,700. Over $324m have been liquidated in Bitcoin longs in the last 24 hours, according to Coinglass data. The broader crypto market fell nearly 5% during the same time.
The $TRUMP meme coin, which had surged during the peak of their alliance, slid 10%. Analysts say Musk’s influence in the crypto space, combined with the political uncertainty, has introduced fresh instability into an already volatile market.
Tesla Plunges as Rift With Trump Threatens Federal Support
Tesla shares, meanwhile, suffered a sharper decline. The stock closed 14% lower on Thursday and has fallen 16% since Musk began attacking Trump’s domestic policy bill last week.
It now trades roughly 33% below where it stood on Inauguration Day, showing growing fears that the feud could jeopardize billions in federal subsidies and contracts vital to Tesla’s long-term prospects.
Until recently, Musk had served as a key informal adviser to Trump, helping shape major policy decisions and frequently representing the administration abroad.
His sudden departure from that inner circle has left a noticeable void in tech-policy alignment, with markets now unsure of how the administration will proceed on key issues such as electric vehicles and space infrastructure.
Adding to the uncertainty, Musk has hinted at launching a new political movement altogether. That possibility, along with the risk of a regulatory reversal or funding pullback, has left investors bracing for a more hostile environment. And that’s not just for Tesla, but for the broader tech and crypto sectors that have often moved in tandem with Musk’s influence.
The clash has become more than a political sideshow. It is a rare case of personality-driven politics colliding with market fundamentals. For now, both crypto and Tesla appear firmly caught in the crossfire.
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