Chronology of Trump–Musk Clash: Crypto Assets Shaken by Political Risk

Trump vs Musk

Clash Between Pro-Crypto Giants

Shock Across the Entire Crypto Market

"Increased Sensitivity to Political Narratives in the Market"

The ongoing conflict since last week between U.S. President Donald Trump and Tesla CEO Elon Musk has sent shockwaves through the global crypto (cryptocurrency) market, extending beyond the political sphere. The influence of political narratives within the market is clearly increasing.

Due to the discord between two titans who once shared a ‘pro-crypto’ stance, anxiety among crypto investors has heightened. On the 6th, the day Trump and Musk engaged in heated exchanges all over social media (SNS), Bitcoin (BTC) dropped more than 3% from the previous day according to CoinMarketCap, Ethereum (ETH) also fell over 7%, and Ripple (XRP) and Solana (SOL) plunged by 5–6% each.

Dispute Started by Tax Cut Criticism... Leading to SNS Spat

The conflict that rocked the markets began on the 3rd (local time), when Musk publicly criticized the Trump administration’s core policy on tax cuts. Through his X (formerly Twitter) account, Musk said, "Sorry, but I can't stand it anymore," and bluntly criticized, "This enormous, preposterous, wasteful budget is revolting and disgusting."

This happened just four days after he stepped down as head of the Department of Government Efficiency (D.O.G.E). Previously, on Musk's farewell event on the 30th of last month, Trump gifted him a 'golden key,' creating a friendly atmosphere. The abrupt reversal was a shock to both politics and the market.

Trump also promptly responded to Musk’s public criticism. On the 5th, he commented, "I used to have a good relationship with Elon, but I don’t really know now. I'm very disappointed," clearly signaling a distancing.

The two continued their exchanges all day on SNS. Trump, via his own platform Truth Social, revealed, "Elon increasingly tested my patience, and I asked him to leave." He also commented, "He went crazy after eliminating the mandatory electric vehicle rule."

Trump went so far as to threaten to end government subsidies and contracts that Musk’s private aerospace company 'SpaceX' was receiving. In response, Musk countered that he would retire the SpaceX Dragon manned spacecraft, managed for NASA’s crewed transportation system, and even reposted a message supporting Trump’s impeachment.

Mediation from Politics & Business Leaders—Musk’s Attempt to Calm the Situation... but Trump Declares “The Relationship Is Over”

Attempts at mediation by political and business figures also continued. On the 6th (local time), billionaire investor and Pershing Square CEO Bill Ackman posted on X, "Trump and Musk are stronger together” and emphasized, “They must peacefully coexist for the national interest." Musk responded, "You're not wrong," indicating some openness to dialogue.

Efforts to resolve the dispute within the Republican Party continued. Don Bacon, Nebraska State Representative, said, "A divided team can’t achieve results. This kind of conflict is not helpful at all." Marjorie Taylor Greene, Georgia State Representative, also urged a reconciliation, saying, "Online criticism isn’t the way to solve problems."

Political outlet Politico cited White House sources, raising hopes for reconciliation by reporting that Trump and Musk were scheduled for a phone call on the evening of the 6th, but confusion arose as the White House later officially denied it.

On the 7th, Musk seemed to be making amends by deleting his post criticizing Trump. However, that same day Trump declared, "My relationship with Musk is over," signaling a possible rupture. However, The Washington Post reported that Trump had also conveyed to J.D. Vance, his closest vice presidential associate, to refrain from criticizing Musk, indicating remaining potential for reconciliation.

Trump & Musk Shift to a Reconciliation Mood... “Crypto Market Risk Mitigated”

Fortunately, the conflict has recently eased. After Musk deleted his critical tweet and publicly apologized, Trump also appeared to open the possibility of repairing their relationship by issuing a calmer message.

On the evening of the 10th, Musk openly apologized on X, stating: “Some of my posts about President Trump went too far.” Trump said in an interview with the New York Post that he thought “it was very good that Musk did that,” and White House Press Secretary Karoline Leavitt also confirmed, “President Trump is aware of Musk’s apology and is grateful for it.”

As the conflict between President Donald Trump, a powerful force in the crypto market, and Tesla CEO Elon Musk moves toward closure, the previously shaken market appears to be stabilizing.

Juwon Lee, a researcher at Xangle Research Center, analyzed: “Both Trump and Musk wield great influence over the crypto market. Their clash led to policy uncertainty and dampened market sentiment. As a result, investors’ risk aversion expanded, triggering a temporary correction in the crypto asset market.”

He continued, “Recently, both sides are showing efforts to resolve the conflict, and their reconciliation is expected to ease risks and normalize prices in the crypto market.” He particularly emphasized, “It’s important to note that crypto is increasingly subject to political narratives.”