The U.S president Donald Trump and his former Senior Advisor Elon Musk had a public clash on June 5. The argument between the two had a big impact on investor mood in the cryptocurrency market. Therefore, market capitalization suffered a massive loss as a result. According to data by TradingView, the total crypto market cap dropped by 5.1% over the last 24 hours. 

Major crypto coins in the market went down, with Dogecoin (DOGE), Ethereum (ETH) and Official Trump (TRUMP) experiencing a large fall. Nearly a quarter million traders were impacted by the liquidations which reached a total of $976.70 million. Additionally, the public feud has raised concerns of market manipulation.

Trump-Musk Feud Adds Fuel to Crypto Market Volatility

Tensions flared after Elon Musk publicly condemned Trump’s latest tax and spending bill. In a strongly worded post on X, the Tesla boss called the bill “a disgusting abomination” and criticized lawmakers for supporting it. 

“I’m sorry, but I just can’t stand it anymore. This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination. Shame on those who voted for it: you know you did wrong. You know it,” Musk wrote. 

Trump responded immediately by accusing Elon Musk of ‘Trump Derangement Syndrome’ and suggesting he might take action. He raised the issue of pulling government assistance from Musk’s companies, making the dispute even more heated and causing more trouble in the market. 

Donald Trump suggests Elon Musk has “Trump derangement syndrome”:

“He’s not the first. People leave my administration and they love us — and then, at some point, they miss it so badly. Some of them embrace it and some of them actually become hostile.”

pic.twitter.com/bktqsJGjNd

— Pop Base (@PopBase) June 5, 2025

The publicity of the dispute made the situation more tense for an already vulnerable crypto market. Investors responded with caution, dumping risky positions and triggering a wave of liquidations.

Dogecoin, ETH, and TRUMP Token Dive

Seven of the top 10 cryptocurrencies recorded losses. Dogecoin, often touted by Musk, slid 7.9% over the past 24 hours. Ethereum wasn’t far behind with a 6.6% drop. Bitcoin also lost ground, falling to $100,500 earlier in the day. 

Even Trump-linked tokens weren’t spared. The meme coin Official Trump (TRUMP) tumbled 10.8% amid the political fallout, underscoring just how deeply the feud impacted both tech and personalized assets.

Based on liquidation data by Coinglass, 216,391 traders have been liquidated over the last 24 hours. Bitcoin has recorded the most liquidations with a total of $351.35 million liquidated. $305.04 million of the total were long position liquidations and $46.31 million in short positions liquidations.

Ethereum comes in second with $249.13 million long position liquidations and $32.16 million short positions liquidations, to make a total of $281.29 million. Other top cryptocurrencies including Solana, Dogecoin and XRP, as well as others, also took a big hit. 

Market Manipulation Theories and Institutional Bearishness

Some analysts believe the feud may be a coordinated effort to drive markets lower. One market watcher claimed, “Elon Musk and Donald Trump have created a fake ‘beef’ to push the markets down. This is manipulation of the highest order.” 

While that theory remains speculative, institutional sentiment has clearly shifted. The Coinbase Prime Index—a measure of U.S. institutional crypto sentiment—flipped negative during the turmoil. Analysts say the dip in this Coinbase index could signal deeper concerns ahead.

🚨 We can clearly see the immediate market reaction following the tensions between Trump and Musk.

📉 The Coinbase Prime Index just flipped negative, showing that U.S. institutional investors and whales suddenly turned bearish.

Let’s see how this plays out in the short term,… pic.twitter.com/9q08xU68cN

— Darkfost (@Darkfost_Coc) June 5, 2025

While Bitcoin has climbed to $104,132 as at press time according to CoinMarketCap data, uncertainty remains high. If the feud continues, traders and institutions alike should brace for continued turbulence in the crypto space.