Event background
On June 5, 2025, Tesla CEO Elon Musk posted on the X platform (formerly Twitter) criticizing the latest fiscal spending bill introduced by Trump, calling it a “budget disaster” and warning that it would impact technological innovation. This statement quickly elicited a strong reaction from Trump.
Donald Trump subsequently hit back on the Truth Social platform, calling Musk “ungrateful” and threatening to cancel the contracts between SpaceX, Tesla, and the government.
The public confrontation between the two public figures quickly attracted media attention, becoming a hot topic on social media platforms and creating a noticeable atmosphere of unease in the financial markets.
The Beginning and End of the Social Media War
Figure:https://x.com/elonmusk/status/1930703865801810022
- On the morning of June 5th: Elon Musk tweeted on X that Trump’s bill is a “disaster” and provided financial data to support this.
- June 5th noon: Trump posted a rebuttal and mocked Musk for “making a fortune off government subsidies”;
- On the evening of June 5th: Two people exchanged more than 20 dynamic posts back and forth, and related keywords topped X’s global trending search.
- The media extensively reported on this matter within hours, causing a rapid increase in risk aversion in the market.
Crypto market reaction analysis
Figure:https://www.gate.com/trade/BTC_USDT
As news of the deteriorating relationship between Trump and Musk continues to ferment, market confidence has noticeably waned. On June 5, the total market value of the crypto market evaporated by nearly $180 billion within 24 hours, with a fall of over 5%.
Bitcoin fell below the key support level of 100,400 USD, with Ethereum’s drop exceeding 6%, while Dogecoin plummeted by 7.9% under the influence of Musk-related sentiment. According to CoinGlass data, the total liquidation in the crypto market that day reached 308 million USD.
Market analysis suggests that this fall is not only due to technical pressure but also compounded by political uncertainty and the celebrity effect, which has intensified short-term emotional fluctuations.
Advice for novice investors
- Stay calm and avoid emotional trading: Short-term market falls are mostly driven by emotions, and do not blindly follow the trend to sell.
- Reasonable asset allocation: Positions can be appropriately allocated to stablecoins (such as USDT or USDC) to reduce volatility risk.
- Set profit-taking and stop-loss levels: Use trading platform tools to set automatic stop-loss lines to prevent liquidation risk.
- Pay attention to macro policy signals: The conflict between Trump and Musk exposes potential variables in the future relationship between fiscal policy and tech companies, and it is necessary to monitor the subsequent movements of the Federal Reserve and Congress.
