Are the Epstein files now a market variable, and if so, does that help answer why crypto is down when no macro trigger seems obvious?
Elon Musk vs Trump saga turns ugly
Tensions between tech entrepreneur Elon Musk and U.S. President Donald Trump has escalated into a public and increasingly personal dispute with clear political and financial dimensions.
Musk, who briefly served in the Trump administration as head of the Department of Government Efficiency, has emerged as a vocal critic of the president’s signature tax and spending package, the “One Big Beautiful Bill.”
Shortly after resigning from his role, Musk publicly condemned the proposal on X, calling it “a disgusting abomination” and accusing Republican lawmakers of fiscal dishonesty. In a direct message aimed at supporters of the bill, he wrote, “You know you did wrong. You know it.”
Since then, the dispute has turned chaotic. Statements from both sides have grown more pointed, and the widening rift between Musk and Trump is beginning to shape conversations in financial markets, particularly in crypto, where both figures carry notable influence.
What are the facts behind this fallout? How are Trump-linked crypto assets reacting? And what can this political rift mean for the digital asset space going forward? Let’s find out.
Elon Musk Epstein accusation dragged the feud into dangerous territory
On June 5, Musk reignited his criticism of President Trump’s “One Big Beautiful Bill” by resurfacing an old 2012 tweet from Trump’s now-defunct Twitter account.
In the post, Trump had warned about rising U.S. deficits, a stance Musk used to highlight what he sees as a contradiction with the bill’s current spending-heavy approach.
Trump responded hours later during a joint press conference with German Chancellor Friedrich Merz. When asked by reporters, the president defended the bill and accused Musk of changing his stance only after leaving the administration.
Trump claimed Musk had been deeply involved in the legislation and voiced no objections while serving in government. “He knew every aspect of this bill, better than almost anybody, and he never had a problem until right after he left,” Trump said.
“He said the most beautiful things about me. He hasn’t said bad things about me personally, but I’m sure that’ll be next. But I’m very disappointed in Elon. I’ve helped Elon a lot.”
The president continued, framing Musk’s criticism as part of a recurring pattern. “People leave my administration, and they love us, and then at some point they miss it so badly, and some of them embrace it, and some of them actually become hostile,” he said.
“I don’t know what it is. It’s sort of Trump derangement syndrome, I guess they call it… They leave and they wake up in the morning, and the glamour’s gone. The whole world is different, and they become hostile.”
Musk rejected the claims immediately. “False, this bill was never shown to me even once and was passed in the dead of night,” he wrote on X, distancing himself from the bill’s development.
He followed with a sharply worded post: “Without me, Republicans would’ve lost,” shifting the tone from policy disagreement to personal conflict.
Trump responded with two posts on Truth Social. In the first, he wrote, “Elon was ‘wearing thin,’ I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!”
In the second, he added, “The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!”
Musk replied by calling the claims “such an obvious lie” and then escalated the exchange. After some time, Musk accused Trump of appearing in sealed Epstein-related documents and implied that this connection was behind the documents’ delay in public release.
He followed by reposting a 1990s video clip showing Trump and Jeffrey Epstein at a social event, signaling a shift in the feud toward more personal and damaging allegations.
Trump did not directly respond to the Epstein accusation. Instead, he returned focus to the legislation later in the day.
“I don’t mind Elon turning against me, but he should have done so months ago. This is one of the Greatest Bills ever… If this Bill doesn’t pass… 68% Tax Increase… I didn’t create this mess, I’m here to FIX IT,” he wrote on Truth Social.
The White House issued a short statement through the press secretary, calling Musk’s remarks “unfortunate” and reaffirming the president’s commitment to passing the bill.
Musk continued to press the issue. He announced on X that SpaceX would begin decommissioning its Dragon spacecraft immediately, citing the administration’s threats to cancel government contracts.
As the conflict deepened, investor Bill Ackman stepped in with a public appeal. “We need you both on the same side,” he wrote, urging cooperation for the country’s benefit. Musk acknowledged the message. “You’re not wrong,” he replied.
When another user suggested both sides cool down, Musk responded, “Good advice. Ok, we won’t decommission Dragon,” pulling back from his earlier statement and signaling a temporary pause in the escalation.
Why is crypto down right after Musk’s Epstein files remark?
The fallout between Elon Musk and President Trump, intensified by threats of canceled contracts and escalating political retaliation, created immediate uncertainty across financial markets. Investors responded quickly as the tone of the conflict sharpened.
The most pronounced impact was seen in the tech sector. Tesla shares fell more than 15% in a single trading session, marking the company’s steepest decline since 2020.
The drop reflected growing concern that Musk’s worsening ties with the administration could jeopardize federal support tied to electric vehicle infrastructure, tax credits, or regulatory treatment.
That caution spread to crypto markets. Bitcoin (BTC), which had been trading above $105,000 on June 5, briefly fell below $101,000 amid the height of the news cycle. As of June 6, BTC had recovered slightly, trading around $103,800.
Over the past 24 hours, Ethereum (ETH) has dropped by approximately 7%, while Solana (SOL) declined by 3%. Ripple (XRP) and Binance Coin (BNB) posted losses ranging between 2.5% and 3%.
However, tokens associated with Trump experienced sharper volatility. The Official Trump (TRUMP) token, launched in January as part of the former president’s direct engagement with the crypto space, lost nearly 10% in 24 hours.
At the time of writing, it was trading around $9.80 and ranked among the three worst-performing tokens of the day.
Meanwhile, Trump’s family office moved to distance itself from a separate crypto initiative using the Trump name. WLFI’s legal team issued a cease-and-desist letter to a group that had launched a “Trump” wallet on Magic Eden.
The wallet, tied to an entity called “Fight Fight Fight,” was accused of unauthorized brand use. Eric Trump posted a public statement clarifying that the family had no affiliation with the wallet project and suggested that their official crypto wallet remained under development.
Trump’s presence in the crypto space has been unusually direct for a sitting president. In January, the TRUMP token reached a $9 billion market cap within hours of its launch, temporarily surpassing several meme coins including PEPE. That rally was short-lived. The token has since dropped around 85% from its peak.
A similar trajectory followed Melania Trump’s token, Official Melania Meme (MELANIA), which saw strong early demand before declining by 96% following a wave of profit-taking and reduced trading activity.
Crypto market prepares for uncertainty
If the conflict between Musk and Trump continues to escalate, it may start to test real economic boundaries. Both men operate at the intersection of influence and power, one through the U.S. government, the other through high-impact private companies.
Any prolonged conflict between them would likely have serious consequences for the economy, public policy, and investor confidence.
Trump has already hinted at the possibility of ending federal subsidies and contracts connected to Musk’s businesses. If that materializes, the fallout could be substantial.
SpaceX is a central player in the U.S. space strategy, working with both NASA and the Pentagon. Pulling back contracts from SpaceX could slow satellite deployments and delay critical space missions.
Similarly, if Tesla’s access to electric vehicle tax credits is revoked, the impact could ripple through clean energy adoption and the broader automotive market.
The market reaction to such moves would not be isolated. Tesla is deeply embedded in major equity indices and often moves in sync with broader tech sentiment.
Any sharp decline in Tesla’s valuation could weigh heavily on technology stocks, potentially dragging down indexes and exchange-traded funds that have large Tesla exposure.
That kind of shift tends to spill into crypto markets as well. Over the past several years, Bitcoin and other digital assets have shown high correlation with tech stocks. When tech leads a sell-off, crypto often follows.
There is also the Trump-specific angle. Since early 2025, the president has openly embraced crypto. He has described himself as the “crypto president” and floated ideas such as a national Bitcoin reserve and friendlier regulatory policies.
Trump’s stance has helped shape retail enthusiasm and provided a layer of political legitimacy to the crypto sector. If political volatility leads to uncertainty around Trump’s policy consistency or long-term position, the market could respond with a fresh wave of risk aversion or sell-offs.
For now, the worst-case scenarios remain hypothetical, but the signals are worth watching. If the conflict continues to escalate, the financial system may be forced to absorb not just economic shocks, but the consequences of two powerful players locked in a very public and personal standoff.
