Cause of the contradiction: Discrepancies in the financial bill

In early June 2025, U.S. President Donald Trump announced a new fiscal spending bill, which sparked controversy over its cuts to tax incentives for renewable energy companies. Elon Musk immediately voiced his criticism, pointing out that the bill “disregards innovation and exacerbates the fiscal deficit,” stating that companies like Tesla and SpaceX will face tremendous pressure.

Trump expressed strong dissatisfaction with this and publicly criticized Musk on social media, accusing him of “biting back” and saying he “made his fortune off the government but now turns his back on people.” The conflict between the two quickly became public.

Public conflict intensifies market sentiment

On June 5, Musk posted several updates on X questioning Trump’s fiscal policies, one of which even suggested that Trump had an “unsettled connection” with the Epstein scandal. Although the tweet was deleted a few hours later, the market had already felt a strong impact.

Trump then continuously posted on Truth Social to counterattack, threatening to “re-examine” all government projects involving Tesla. Due to the high influence of both in the political and business circles, public opinion quickly escalated, and investors began to worry about whether there would be larger policy changes.

The short-term pressure on the crypto market

Due to the impact of the event, the crypto market experienced severe fluctuations on June 5. Bitcoin rapidly declined from a high of $105,000, hitting a low of $100,372, with a 24-hour drop of nearly 4.7%. Ethereum fell to a new low since May, while Dogecoin was further hit hard due to sentiments related to Musk, with a single-day drop of nearly 8%.

According to data platform CoinGlass, the liquidation amount in the crypto market reached $300 million on that day, mainly concentrated in long contracts. Some mid-cap coins that were originally in an upward trend, such as Solana and TON, also saw a 3%-6% pullback.

The market generally believes that although this plunge is not a systemic crisis, the short-term chain reaction triggered by celebrity-level events is still enough to induce collective panic among novice investors.

How should investors adjust their strategies?

For ordinary investors, especially beginners, it is recommended to adopt the following strategies when encountering sudden downturn events like this:

1. Avoid chasing highs and selling lows easily: Market fluctuations triggered by political or celebrity news often come quickly and go quickly, so it is crucial to avoid emotional trading.
2. Set up risk control mechanisms: You can set stop-loss points on the exchange, for example, automatically sell a portion when your Bitcoin position drops below 5% to reduce losses.
3. Retain some stablecoin positions: In uncertain market conditions, stablecoins like USDT and USDC not only serve as a hedge but also facilitate subsequent accumulation at lower prices.
4. Observe the evolution of news and avoid blindly believing rumors: Although Musk’s “revelations” have caused a huge uproar, statements lacking supporting evidence are often quickly corrected by the market, making rational judgment especially important.

Conclusion

The rupture between Trump and Musk is a microcosm of the power struggle between politics and business, and it reminds us once again: in the crypto market, emotional drives and external variables often have more destructive power than technical indicators. New investors might consider such events as a risk education, building a scientific capital management system in advance to cope calmly between bullish and bearish markets.