Crypto market liquidations approach $1 billion amid Trump and Musk spat

What’s new? Bitcoin briefly fell 5% on Friday, June 6, as the broader markets reacted negatively to US President Donald Trump and Tesla CEO Elon Musk’s spat on the social networks Truth Social and X, respectively, which they own.

CoinGecko aggregator data

What else is known? In the public sphere, the spat escalated after Trump noted in a meeting with German Chancellor Friedrich Merz: that Musk should not criticize the tax relief bill. Musk called the document with the official title One Big Beautiful Bill “an abomination”, and noted that it will increase the budget deficit.

In response, the head of Tesla said that without him, Trump would have lost the election, and the Republicans would not have been able to take an absolute majority in Congress.

In turn, Trump threatened to withdraw contracts and government subsidies from SpaceX to solve the problem of budget deficit, which Musk pointed out.

Following this, Musk claimed that Trump was featured in Jeffrey Epstein’s child trafficking case documents, which is why they have not yet been made public. According to one unofficial version, Epstein’s suicide in custody in 2019 was staged because he could allegedly testify against dignitaries and celebrities visiting his island.

Trump responded by saying that he had been planning for months to fire Musk from the administration, who headed the Department of Government Efficiency (DOGE), and the latter, knowing this, had “lost his mind”.

Musk said he would begin decommissioning SpaceX’s Dragon spacecraft and also suggested that Trump should be impeached and that Vice President JD Vance should be appointed to replace him.

The quarrel between the president and the billionaire continues at the moment.

The political standoff has triggered cross-selling of assets that has seen Tesla’s market capitalization shrink by $150 billion and the liquidation of long positions in BTC amount to about $308 million.

The escalation coincided with a notable downturn in risk assets, with bitcoin falling as low as $100 400 before rebounding above $103 000.

Bitcoin’s sharp fall followed by a quick rebound shows investors’ sensitivity to political volatility. According to CoinGlass data, long positions worth $873 million were liquidated in the crypto market overnight. Total liquidations with short positions approached $1 billion.

CryptoSlate data confirms that although the BTC drawdown reached 5%, the psychological level of $100 000 attracted strong buyer interest.

Traders are now left to wonder if political figures pose a greater volatility risk than macroeconomic indicators or bitcoin’s halving cycles.

While Musk has warned that Trump’s expansion of duties will trigger a US recession in the second half of the year, the market is focused on whether bitcoin can sustainably hold six figures in such an unpredictable environment.