A very public falling out between U.S. President Donald Trump and billionaire Elon Musk has added fuel to an already volatile financial environment, triggering a broad-based sell-off across traditional equities and digital assets. Tesla’s stock plummeted 15% on Thursday, dragging risk assets down with it, including Bitcoin, which tested its $100,000 support level amid nearly $1 billion in liquidations.
While much of the attention has focused on the high-profile clash between two of the world’s most influential figures, crypto analyst and Coin Bureau founder Nic Puckrin says the impact runs deeper.
“The public spat we’re seeing between Musk and Trump was nothing if not predictable,” Puckrin said. “But the markets don’t like this at all, and it’s only likely to get worse as emotions escalate. Combine that with uncertainty around Trump’s ‘big, beautiful bill,’ the debt ceiling, and eight-month-high jobless claims, and you’ve got a perfect storm.”
President Trump and Musk’s dispute was triggered by disagreements over Trump’s tax and spending bill, which the Tesla and X CEO criticized as a “disgusting abomination.” Musk had recently stepped aside from his role leading the Department of Government Efficiency (DOGE) in order to focus on his business ventures.
A White House official told NBC News on Friday that the president is “not interested” in having a call with Musk to resolve the feud.
Puckrin noted Bitcoin’s long/short ratio has tipped slightly bearish at 47/53, a potential indicator of an impending reversal.
“A close above $102,000 today would be a good sign the sell-off is losing steam,” he said. “But if that reversal fails at $106,000, we could be in for more downside.”
The price of Bitcoin traded around $104,700 at publication time, up 1.6% over the past 24 hours, according to The Block’s BTC price data. Of note, the Official Trump token is down another 3.6% after shedding about 10% Thursday afternoon.
Long-term signals
Kevin Rusher, founder of RWA-focused DeFi protocol RAAC, expressed frustration with the market’s sensitivity to “emotional social media posts.”
“If the crypto market reacts so violently to a spat that has nothing to do with fundamentals, it shows just how fragile and illiquid things still are,” Rusher said. “We’re still at the mercy of narratives rather than grounded in real liquidity.”
Still, Rusher sees strong long-term signals.
“Institutions like BlackRock, JPMorgan, and Citi are building toward tokenized real-world assets,” he continued. “That’s where the durable liquidity is coming from. We’re witnessing growing pains on the way to a more mature, stable ecosystem.”
Meanwhile, OTC trader Jake O. from Wintermute said Thursday’s session was marked by heavy liquidations, not panic.
“Despite media narratives tying the drop to Musk and Trump, sometimes it’s just a case of more sellers than buyers,” he said. “$345 million in BTC and $284 million in ETH liquidations drove the downside, yet volatility didn’t spike — suggesting a relatively orderly flush.”
Spot prices saw some recovery Friday morning on dip-buying interest but warned that positioning, especially in altcoins, remains fragile. “Markets don’t forget liquidation events quickly,” Jake O. said.
The GMCI 30 is down 0.7% to 158.63 at publication time, though still up 14% over the past month. The index represents a selection of the top 30 cryptocurrencies by market capitalization.
© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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