Elon Musk’s feud with President Trump is no longer just political – it’s hitting the markets. With Tesla’s stock slipping and Bitcoin under pressure, the fallout is raising serious concerns for both traditional investors and the crypto crowd.
Where will this feud end up?
Tesla Stock Tanks After Political Showdown
Since Musk publicly criticized Trump’s $5 trillion spending bill in June and launched his new political group, the America Party, Tesla shares have dropped 14%. On July 7 alone, they fell another 6.8%, wiping out $79 billion in value.
The bigger worry is what comes next. With Republicans now holding power across all three branches of the U.S. government, investors fear Tesla could lose its favorable treatment – especially government support for electric vehicles. SpaceX, which relies on $22 billion in federal contracts, could also face serious disruption.
Tesla’s Bitcoin Holdings Now a Market Risk
Tesla owns 11,509 BTC, originally valued at $1.2 billion. But with Bitcoin down 12%, that stash is now worth around $951 million. If Tesla’s stock keeps falling, Musk may be forced to sell some of the company’s Bitcoin to raise cash.
That could trigger a chain reaction in the crypto market. Investor sentiment is already shaky, and a major sell-off by Tesla would only deepen the uncertainty, potentially dragging Bitcoin prices down even further.
How Tesla Could Move the Bitcoin Market
Thanks to new FASB accounting rules in 2025, Tesla now has to report quarterly valuations of its Bitcoin holdings. Earlier this year, when Bitcoin dropped to $93,000, Tesla took a hit. But back in Q4 2024, when Bitcoin spiked to $106,000, the company saw a $600 million boost in profits.
Now, with markets on edge and Tesla’s stock in decline, investors are wondering what Musk will do. Selling could crash prices. But holding firm would send a message of strength and help stabilize the crypto market.
What Experts Say
Crypto analyst Nic Puckrin said the Musk-Trump feud was predictable, but their media dominance is unsettling markets, and rising tensions could make things worse.
Anthony Pompliano said Musk could use Tesla’s Bitcoin to offset Trump’s EV subsidy cuts. He views Musk’s America Party as pro-Bitcoin and expects Tesla to hold or grow its BTC holdings for financial stability amid a feud with Trump.
Business First? Tesla’s Future Hangs in the Balance
While Musk battles it out in politics, Tesla is rolling out its new robotaxi service in Austin and facing fierce competition from Chinese EV giant BYD. Many investors feel this is where Musk should be focusing his attention, not on founding a political party.
SpaceX’s Mars mission and Musk’s AI venture xAI aren’t exposed to public market swings like Tesla is. But Tesla’s board, though supportive so far, may push for Musk to refocus on business and settle tensions with the Trump administration.
Here’s the Bottom Line
Musk’s next move matters. If he holds Tesla’s Bitcoin, it could stabilize the crypto market. But if he’s forced to sell, it could spark another wave of volatility. As Tesla’s fate becomes more tied to Musk’s politics, the entire crypto space is watching closely.
