The battle between Trump and Musk, is cryptocurrency becoming a political weapon in the United States?

Source: Talking about Li and Talking about the Outside

Today (June 6, Beijing time), I saw some partners in the group discussing: Musk and Trump have completely torn apart.

So I searched for this big news, and the general process is that Trump has been continuously attacking Musk on his social platform (Truth Social), as shown in the image below.

These statements seem to have angered Musk, leading to the tweet that many people have already seen online today, where Musk tweeted that Trump appears in Epstein's documents, which is the real reason these documents have not been made public. As shown in the image below.

The feelings of these big shots are sometimes really hard to understand. Just a while ago, the two were still appreciating each other, and now they are actually targeting each other and exposing each other's secrets online. This tangible "war" between them seems to have directly affected the financial market, with all three major U.S. stock indices falling at the close, and Tesla's stock plummeting by 14.26%, as shown in the image below.

1. The Battle Between Trump and Musk

This seems to be a rather interesting "war," and it is a "war" between the two richest and most powerful people on Earth. Although currently, these two are just arguing on social platforms, we should not overlook the potential impact that this argument might bring, as it could continue to affect the financial market (including the crypto market) in ways we do not expect.

Since Trump took office, we have witnessed his arrogance multiple times, and it seems that a simple statement (a tweet) from him could cause a market earthquake. But who ultimately gets hurt? It still seems to be the vast number of retail investors.

Returning to the crypto market, due to the battle between Trump and Musk, the crypto market also experienced some pullbacks today, especially DOGE, which represents Musk, dropping nearly 10% in a single day, and TRUMP, which represents Trump, did the same.

However, as mentioned in our previous articles, the market, due to various uncertainties, also presents various opportunities. It is said that some people have sensitively seized this situation and made money by shorting DOGE and TRUMP. However, this kind of profit is not suitable for most people, so we do not need to envy too much; we should continue to manage our positions according to our trading discipline and plans.

In this quarrel between Trump and Musk, Trump also threatened to cut off federal funding for companies related to Musk. If this actually happens, it could affect the R&D budgets and policy support of some tech companies, thereby impacting the development of the tech sector. After all, tech companies represented by Musk have been at the forefront of technology in recent years (including satellites, clean energy deployment, etc.).

Currently, the crypto market is not isolated; it is significantly influenced by the traditional economy (such as the U.S. stock market) and macroeconomic conditions. Moreover, Bitcoin is hovering around historical highs. If this situation continues to develop, combined with the already fragile macroeconomic situation, it could lead to significant capital movements for risk aversion. The sell-off in tech stocks may continue to spread to the crypto market, causing the already weak market structure to undergo a new phase of reversal. If this continues, the battle between Trump and Musk could very well evolve into a black swan event for a phase adjustment in the market this summer.

However, there are also reports online that Musk and Trump are considering reconciliation, and Musk himself seems to have the intention to ease the conflict, as shown in the image below.

In short, what we see may be real, may be fake, or may be what others want us to see. In fact, this world is composed of various truths and falsehoods.

Regardless of how the battle between Trump and Musk develops next, for us bystanders, this year has indeed experienced too many unbelievable events. Currently, we seem to be witnessing a "struggle" between the most influential people in the world. Whether it is a conspiracy, a farce, or a new crisis trigger, what we need to do in response is quite simple: remain vigilant and protect our positions.

2. Is Cryptocurrency Becoming Trump's Political Weapon?

Last year (2024), the market went crazy due to Trump's crypto-friendly attitude, and Bitcoin successfully broke through the historical threshold of $100,000. However, since Trump officially took office, his various statements and actions have brought even greater uncertainty to the market.

Looking at some of the events that have occurred, it seems that Trump is not only satisfied with the tariff trade war; he is also thinking of building a crypto empire for himself (America):

One of the things that has overturned many people's perceptions this year is the issuance of a coin by the U.S. president, which was previously hard to imagine. With the launch of the TRUMP token in January, Trump began to leverage his influence and that of the White House to delve into the cryptocurrency market. In March, he announced the establishment of a strategic Bitcoin reserve and digital asset reserve, and then in April, he directly established a stablecoin worth $2 billion (the USD1 stablecoin issued by World Liberty Financial, with a market cap of approximately $2.18 billion at the time of writing)…

In the past, cryptocurrencies were more regarded as a representation and symbol of freedom, decentralization, and anti-government sentiment. However, now, with the continuous involvement of the most powerful individuals and major institutions (including pushing for the approval of BTC ETFs), it seems that cryptocurrencies are slowly being controlled by traditional industry giants and used as a new financial weapon for them.

Although the total market value of the cryptocurrency market is only $3.2 trillion, this does not prevent Trump and some institutions from making a fortune while continuing to use cryptocurrencies as a long-term new weapon to guide other countries and people around the world to chase after them.

Take World Liberty Financial (WLFI), a cryptocurrency company created and supported by the Trump family, as an example. The USD1 stablecoin launched by WLFI can be understood as being supported by the Abu Dhabi government, as they received a $20 million investment from Abu Dhabi. From another perspective, can we also understand that President Trump can simply obtain $2 billion in foreign government funding through cryptocurrency?

This is happening while the regulatory environment for cryptocurrencies in the U.S. remains unclear. Imagine if the U.S. formally passes a stablecoin bill this year (August is a critical time point), and stablecoins gain legal status in the U.S., they could very well become a political weapon and global harvesting tool for Trump.

Although theoretically, this would certainly be beneficial for the crypto market, as stablecoins become legal, traditional funds (including qualified private companies that can issue dollar stablecoins and are supported and protected by federal regulatory legislation) can participate in the crypto market without concerns, which would, to some extent, continue to drive up the prices of Bitcoin and other cryptocurrencies. But at the same time, because cryptocurrencies may become political tools for the U.S., this could involve new political and financial games between certain countries, making it more difficult for many retail investors.

I do not know how the crypto market will develop in the future, but Bitcoin, which once belonged to Satoshi Nakamoto, was "rebellious," advocating complete freedom and decentralization. Currently, it seems that the "rebellious" core of Bitcoin is slowly undergoing some changes, as it appears to be used by Trump (the U.S.) as a new tool, becoming one of the means for Trump to achieve his MAGA goals.

The original rules of the game seem to have begun to change, and Trump is someone who understands better than anyone how to play the game well. Those who originally hoped that cryptocurrencies would be widely "adopted" freely now seem to see cryptocurrencies being "occupied" by power and capital.

As for what we should do next, the best choice remains: to continue holding onto our own pieces of the pie and patiently seize opportunities in the larger cycle. In short, this field still presents rare opportunities for many, but for many others, it will also become increasingly difficult.