Crypto Market Plummets 5% Amid Trump Musk Feud

The cryptocurrency market is experiencing significant turbulence as the public feud between U.S. President Donald Trump and Tesla CEO Elon Musk intensifies. The dispute, which initially centered around the potential impact of a proposed tax and spending bill on U.S. national debt, has rapidly escalated into a heated exchange of accusations and threats.

Bitcoin, the leading cryptocurrency, has been particularly affected by the escalating tensions. Late in the U.S. trading day, Bitcoin was down more than 4% to $100,500, threatening to dip back into five digits for the first time in a month. This decline reflects broader market sentiment, as the CoinDesk 20 index, which tracks the top 20 cryptocurrencies by market capitalization, excluding exchange coins, memecoins, and stablecoins, has also seen a decline of more than 5%. Notable underperformers include SOL and SUI, which have both experienced losses exceeding 7%.

The impact of the feud extends beyond cryptocurrencies to related stocks. Coinbase, a major cryptocurrency exchange, saw its stock drop by 4.6%, while MicroStrategy, a company known for its significant Bitcoin holdings, slid by 2.4%. Several mining companies, including MARA Holdings, Riot Platforms, and Core Scientific, also suffered losses of around 5%.

The escalation of the feud began with Trump accusing Musk of going "crazy" and threatening to terminate government contracts for all Musk-led companies. Musk, in response, made several provocative statements, including allegations that Trump was implicated in the Jeffrey Epstein files and agreeing with calls for Trump's impeachment. Tesla's stock also took a hit, falling more than 14% on Thursday.

Adding to the market's volatility, the initial public offering (IPO) of Circle, a stablecoin issuer, has also contributed to the uncertainty. While Circle's stock soared to above $100 at one point before closing at $83, the euphoria surrounding the IPO has been tempered by memories of the historic top for crypto markets during Coinbase's 2021 IPO.

The ongoing feud between Musk and Trump has created a climate of uncertainty and risk aversion in the cryptocurrency market. As both figures continue to trade barbs and make bold statements, the market remains on edge, with investors closely monitoring the situation for any signs of resolution or further escalation. The outcome of this feud could have significant implications for the cryptocurrency market and the broader economy, as the actions of these influential figures continue to shape market sentiment and investor behavior.