Crypto Market Tumbles 5% Amid Trump-Musk Feud: Fear Grips Investors

Total Market Cap Sinks to $3.29 Trillion as Political Tensions Soar

Hang on to your hats, folks! The crypto world just took a wild 5% nosedive on Friday, June 6, as the gloves came off in the heated showdown between President Donald Trump and Elon Musk. This explosive clash sent investor confidence into a tailspin over the past 24 hours.

Right now, the total crypto market cap is reeling at $3.29 trillion, a far cry from the $4.1 trillion it was flexing on June 5. According to the folks at Alternative, the Crypto Fear & Greed Index took a brutal 12-point hit, plummeting from 57 to 45 and diving straight into "fear" territory. And you better believe this drop in morale is all thanks to the public brawl between Trump and Musk that's also shaking up traditional markets.

Bitcoin (BTC) is down 3.1% and currently trading at $101,843. But hold on tight, because Ethereum (ETH) is leading the pack of top 10 altcoins with a staggering 7.5% slide. Solana (SOL), XRP (XRP), and BNB (BNB) aren't far behind, each taking a 5% hit. And get this: nearly $986 million in crypto positions got wiped out in the last day alone, according to Coinglass data. That's a mind-blowing 358% increase in liquidations!

The crypto market's relative strength index just tanked to 32.7, screaming oversold conditions, while open interest took a 2.71% dive to $140 billion.

So, what sparked this rollercoaster ride? It all kicked off with a series of political escalations. The fireworks started when Musk quit the Department of Government Efficiency and slammed the President's latest spending bill, the Big Beautiful Bill, right in public.

Trump didn't take kindly to that, and he hit back hard by axing Jared Isaacman's NASA nomination, a buddy of Musk, and threatening to pull the plug on all government contracts for Musk's businesses.

But the feud didn't stop there. On June 5, Musk dropped a bombshell, accusing Trump of being linked to the Jeffrey Epstein files and throwing his weight behind calls for the President's impeachment. Trump fired back, calling Musk "crazy." As the tension skyrocketed, Tesla shares crashed over 14%, and Musk dropped a bombshell on Twitter, announcing that SpaceX would start decommissioning its Dragon spacecraft.

In light of the President's statement about cancellation of my government contracts, @SpaceX will begin decommissioning its Dragon spacecraft immediately.

And if you thought that was wild, get a load of this: Dogecoin (DOGE) took the hardest hit among the big players, plummeting nearly 20% in the last 24 hours. Sure, DOGE might not have much practical use, but its price has always been a wild ride tied to Musk's every move and tweet. The token had been riding high after Trump's election win, with hopes of crypto-friendly policies on the horizon. But now, as that optimism fades, investors are bailing out.

It's not just digital assets feeling the heat. Crypto-related stocks are also taking a beating. Mining companies like MARA, Riot Platforms, and Core Scientific all saw around 5% losses, while Coinbase dropped 4.6% and Strategy fell 2.4%.

But amidst all this chaos, the crypto community is buzzing with political uncertainty. Over on the decentralized prediction platform Polymarket, traders are putting a 10% chance on Trump getting impeached before the end of 2025. And get this: almost half a million bucks has already been wagered on that outcome.

So, buckle up, because this wild ride might not be over yet. With macro risks on the rise and crypto sentiment taking a hit, the market could be in for more volatility in the coming days.