Trump's Bill Passes Senate Amid Musk's Criticism, Bitcoin Drops

Donald Trump’s “Big Beautiful Bill” has been narrowly passed by the Senate, following hours of intense negotiations that extended late into the night. The bill's passage was secured by Vice President JD Vance casting the tie-breaking vote. The legislation now faces significant opposition in the House of Representatives, casting doubt on Trump’s ambition to have the bill signed into law by July 4.

The “Big Beautiful Bill” includes several key provisions. It extends generous tax cuts introduced during Trump’s first term, which critics argue disproportionately benefit America’s highest earners. Additionally, tips would no longer be taxable, potentially benefiting the service sector. The bill also proposes aggressive new investments to finance mass deportations and substantial cuts to Medicaid, with the debt ceiling raised to $5 trillion. This is where Elon Musk enters the picture.

At the beginning of Trump’s second term, Musk was appointed to head the Department of Government Efficiency, tasked with slashing federal spending. In June, Musk described the “Big Beautiful Bill” as a “disgusting abomination” because it would undo much of his work in cutting costs. The two figures engaged in a heated exchange on social media, with Musk claiming Trump’s name is in the Epstein files and Trump threatening to cancel Musk’s government contracts. Despite a brief truce, tensions have resurfaced as the bill moves closer to reality.

Musk has criticized the bill for its excessive spending and has floated the idea of forming a new political party. He has also threatened to name and shame supporters of the bill during the midterms, a significant shift from his previous pledge to stay out of politics. Trump responded by suggesting he might consider deporting Musk, a move that, while unlikely, has spooked Tesla investors and affected Bitcoin’s value.

Musk has warned that the conflict could escalate further, posting that he is tempted to escalate but will refrain for now. The resumption of hostilities has had an impact on Tesla’s stock and Bitcoin’s value, which was down modestly. The correlation between Tesla’s share price and Bitcoin has been positive at times, suggesting that continued conflict could drag Bitcoin’s value down further.

In the longer term, the “Big Beautiful Bill” highlights the need for digital assets like Bitcoin, which offer an alternative to a devaluing dollar and a U.S. economy burdened by debt. Many Bitcoin advocates see the bill as underscoring the importance of Bitcoin as a means of preserving wealth. However, the bill’s details are still being finalized, and a proposed amendment by Senator Cynthia Lummis to address the unfair tax treatment of digital assets has been sidelined for now.