A sharp rift between US President Donald Trump and billionaire Elon Musk has triggered chaos in both the cryptocurrency markets and Wall Street.
On Thursday, Musk took to social media platform X to make explosive claims involving Trump and the late Jeffrey Epstein, alleging that the President was named in undisclosed FBI files.
The move, which Musk referred to as “the really big bomb”, follows growing tensions between the two figures that have escalated over the past week.
The allegations come months after the FBI released the first phase of its Epstein files in February, which included heavy redactions. Since then, no additional information has been made public.
Epstein, a convicted sex offender with ties to high-profile figures including politicians and royalty, died in prison in 2019 under circumstances that remain controversial.
Musk’s assertion that Trump is mentioned in the sealed portions of those files has sparked significant backlash and market uncertainty.
As political hostility intensified, the alliance between the world’s richest man and the US President appears to have completely broken down.
Trump has publicly stated that he removed Musk from his governmental advisory role, while Musk has openly criticised Trump’s economic policies, including a new spending bill that he dubbed the “Big Ugly Bill”.
Musk also claimed that Trump would have lost the 2024 election without his support, adding fuel to an already combustible situation.
The impact has been immediate. Both the Dogecoin ($DOGE) and the Official Trump token ($TRUMP) saw sharp declines.
According to data from CoinGecko, Dogecoin fell by 6.4% in 24 hours, settling at $0.1788 and ranking as the seventh worst-performing asset in the top 100 cryptocurrencies.
The Official Trump token dropped 10% to $9.66, making it the second biggest loser of the day.
Dogecoin plunges as Musk withdraws support
Once dubbed “the people’s crypto” by Musk, Dogecoin’s fate has long been tied to his public endorsements.
The billionaire has supported the memecoin since 2021, famously calling himself the “Dogefather” and even accepting DOGE payments for Tesla merchandise. The token’s popularity surged whenever Musk posted about it or made it part of his businesses.
The relationship between Dogecoin and political influence became more formalised when Musk joined Trump’s Department of Government Efficiency (DOGE), which even briefly featured the Dogecoin logo on its website. But that support is now in question.
Musk’s recent departure from the department and his rising political criticisms have led to a marked downturn in the token’s price.
According to TradingView and Cointelegraph Markets Pro, DOGE has closed its third consecutive week in the red. Over the past seven days, it has dropped 14%, extending a three-week decline to a total of 28%.
The price is now hovering at $0.17, with technical analysts identifying a bearish flag pattern that could lead to further declines toward $0.06.
Support levels at $0.15 and $0.13 are under watch. If breached, the chart suggests a deeper slide is possible.
Indicators such as the Relative Strength Index (RSI) have also shifted into bearish territory, with the RSI falling from 52 to 43 over three weeks, showing increasing downward momentum.
This isn’t the first time Dogecoin’s price has responded strongly to Musk’s actions. In 2022, the coin jumped 25% in a single day after Tesla announced DOGE acceptance.
In April 2023, the token surged over 30% after Musk swapped Twitter’s bluebird logo with Dogecoin’s Shiba Inu symbol. But as Musk’s political affiliations grow unpredictable, the crypto community is left questioning DOGE’s future as a speculative asset.
Memecoins collapse, crypto market faces turmoil
The fallout between Trump and Musk hasn’t just hit Dogecoin. The Official Trump token also took a nosedive, dropping 10% in one day.
The token had previously rallied following Trump’s 2024 election victory, and even attracted attention during a dinner event two weeks ago with its top 220 holders – an event that drew criticism when attendees were reportedly served “cheap steak”.
Adding to the spectacle, Trump shared a Newsmax article suggesting that the TRUMP token acts as a “tracker” of his performance, calling it the “ultimate polling project”.
Still, traders appear to be distancing themselves, with the token now one of the worst performers in the market.
Meanwhile, the broader memecoin space has exploded with new tokens cashing in on the drama. Dune Analytics reports that 37,769 tokens were launched on Thursday alone, a 25% increase from the previous day.
Among them, “President Vs Elon” briefly reached an $8 million market cap before crashing 75%. A token dubbed “Pwedo” – a reference to Epstein-related rumours – spiked to $945,450 before plummeting 58%.
Even a newly launched “Official Musk” token mirrored the Trump coin’s trajectory, rising past $9 million before falling 64.5% to $3.19 million.
The most dramatic example was the “Kill Big Beautiful Bill” token, created in response to Musk’s criticism of Trump’s spending bill.
The token initially dumped 86.7% to $6.97 million, but then surged 679% to a record $54.4 million after Musk’s Epstein allegations.
Beyond meme tokens, the wider crypto market has taken a significant hit. According to Coinglass, more than $980 million in assets were liquidated in just 24 hours, affecting over 224,000 traders.
Bitcoin ($BTC) fell by nearly 4%, dipping from $105,915 to $100,500 before a modest recovery. Ethereum ($ETH) saw an even steeper drop of over 7%. Both assets were caught in heightened volatility triggered by a coinciding $3.8 billion options expiry.
Tesla wasn’t spared either. The electric vehicle maker, a core component of Musk’s business empire, saw its market capitalisation plunge by $153 billion in one day – a 14.26% loss.
The stock later showed signs of recovery in pre-market trading, climbing 5.06% amid rumours of reconciliation between Musk and Trump.
Reports by POLITICO suggest White House aides are now working to de-escalate tensions, with a scheduled call between Musk and officials set for Friday.
Billionaire investor, Bill Ackman, also stepped in, urging the two men to make peace. “I support @realDonaldTrump and @elonmusk and they should make peace for the benefit of our great country”, he posted. Musk’s reply – “You’re not wrong” – added a small dose of optimism to an otherwise chaotic period.
Despite these efforts, market sentiment remains fragile. Analysts point to whale activity and technical patterns as evidence of a risk-off trend.
As ETF outflows rise and macroeconomic uncertainty persists, the crypto market finds itself in a precarious position.
For now, traders are left with a dilemma: whether to see the current downturn as a buying opportunity or brace for a deeper decline.
One user summed it up on X: “It will touch $99,400 before reaching a new all-time high, no matter what Elon or Trump do”. But until the political noise quiets, volatility looks set to remain the norm.
