Musk and Trump fall out. What is the reason for the war of words? Will it affect the crypto market?

Deng Tong, Jinse Finance

In November 2024, Musk was featured in Time magazine. On the turbulent road to the election, Musk once called the shots in American politics - hosting rallies, guiding government appointments, and setting the agenda for the next US president. Time once commented on Musk: "Standing next to him, even Trump seemed almost in awe, more a companion than a boss, because the planet and its challenges were not big enough for him."

For details, please see the Jinse Finance article: "Time Magazine: How did Musk become a "kingmaker" step by step? 》

However, the two only spent more than 100 days of honeymoon. Shortly after Musk left DOGE, the two suddenly fell out.

For details, please refer to the Golden Finance article: "Musk is about to leave his unfulfilled ambitions DOGE"

What made the two people turn against each other? How did the quarrel between the two influential figures escalate? How does the outside world view this quarrel of the century? Will Musk return to the White House? Is Tesla facing a major crisis? What impact will it have on the crypto market?

1. Timeline of the escalation of the verbal war between the world's richest man and the super-knowledgeable king

The dispute began last week, stemming from Trump's "big and beautiful" bill. It began to heat up on Wednesday local time and reached a fever pitch in the Oval Office on Thursday afternoon. The following is a timeline of the escalating quarrel between Musk and Trump by Golden Finance.

Wednesday, May 28: Musk criticized Trump's plan for a new tax and spending bill in an interview with CBS News, saying that the legislation of the plan "disappointed" him. Trump later admitted to reporters that he was "unhappy with some aspects" of the bill, but at the same time "excited" about some aspects such as tax cuts. Trump did not directly comment on Musk's remarks at the time.

Thursday, May 29: Musk announced that he would leave the Trump administration after his term as a special government employee ends. At this time, the relationship between the two was still very harmonious, and Trump even publicly stated: "He will always be with us, Elon is great!"

Friday, May 30: Musk appeared at a White House press conference, and Trump praised Musk highly. Trump said Musk "didn't really leave" and would continue to "go back and forth" to the White House.

Monday, June 2: Trump defended his "big and beautiful bill" in an article on the "Truth Social" website, claiming that there were "many false statements" against his landmark economic policy.

Tuesday, June 3:Musk once again slammed Trump's planned bill in a post on X, calling it "massive, outrageous" and "disgustingly ugly."

This marked a sudden escalation in the verbal war between the two.

Wednesday, June 4:Musk called for a new spending bill "that would not significantly increase the (US government budget) deficit and raise the debt ceiling." Musk urged his followers to call on their representatives to oppose Trump's bill.

Thursday, June 5: Musk referenced a series of old Trump posts on X from 2012 and 2013 in which Trump criticized government spending.

Speaking in the Oval Office alongside German Chancellor Friedrich Merz, Trump said he and Musk "used to" have a good relationship but "I don't know if we're going to have that relationship anymore." He also said Musk was "unhappy" with cuts to electric vehicle subsidies in his planned bill because they would affect the billionaire's Tesla and SpaceX businesses.

Responding live from the Oval Office, Musk refuted Trump's comments.

Thursday, June 512:24: Back at the White House, Trump tells reporters that Musk knows "every aspect of the bill" and says he is "very disappointed in Musk."

12:25: "Fake," Musk responds on X. "This bill was not shown to me once and was passed so quickly in the middle of the night that almost no one in Congress read it!"

12:44: Musk reposts an old Trump post on X, highlighting moments when the president criticized the US budget deficit. “Where is this guy today??”

12:46: Musk said in response to another user on X: “Without me, Trump would have lost the election.” He then said: “How ungrateful.”

13:44: Musk continued to claim on X that the “Big Ugly Bill will increase the deficit to $2.5 trillion.”

13:49: Musk quoted Trump’s old post on X about government spending. He asked: "Where is the person who wrote these words? Was he replaced by a body double?!"

13:57: Musk asked in a poll on X: "Is it time to create a new party in America that truly represents the middle 80%?"

14:37: Trump began posting on his "Truth Social" platform, saying Musk was "exhausted" so he asked him to leave the White House and claimed that Musk was "crazy."

Musk responded: This is an "obvious lie."

Trump continued in another post: "The easiest way to save money in our budget is to end Musk's government subsidies and contracts."

15:10: Musk claimed without providing evidence that Trump appeared in the "Epstein Files." "It's time to detonate the real bombshell, President Trump's documents in the Epstein case. This is the real reason why the documents have not been made public."

16:06: Trump posted that he didn't mind "Elon betrayed me" and would continue to defend his bill.

16:09: In response to Trump's suggestion that he might terminate government contracts with Musk's companies, Musk said he would "immediately" retire the Dragon spacecraft - a spacecraft capable of traveling to the International Space Station.

16:11: Musk appeared to support Trump’s impeachment, while citing a conspiracy theorist who shared Epstein’s dossier about the president.

16:26: Musk posted an attack on another of Trump’s signature policies, trade tariffs, saying they “will lead to a recession in the second half of this year.”

21:27: Musk’s attitude seemed to soften, replying to another Trump supporter, billionaire Bill Ackman, on X, “You are not wrong,” who called on the two to “make peace for the good of our great country.”

Friday, June 6:Trump described Musk as "a man who has lost his mind" in an interview with ABC News and said he was "not particularly" interested in talking to Musk.

It was previously reported that Trump and the tech billionaire would speak by phone later, but the White House told the BBC that Trump did not plan to speak to him today.

The BBC's US partner CBS also reported that Trump is considering selling his Tesla - a car he bought to help Musk promote the company.

Saturday 7 June: Musk tweets "The America Party" on X, quoting another previous tweet: The people have spoken, America needs a new party to represent the 80% in the middle. 80% of people agree, it's destiny.

According to official website data, Polymarket predicts that the probability of "Musk establishing a new political party this year" is 16%, and the probability of "Musk establishing a new political party before the end of June" is 5%.  

2. How does the outside world view this century of verbal battle?

Musk's father, Errol Musk, admitted in an interview with Russian media that his son Elon's public quarrel with Trump was a mistake. Errol said, "This is just a small matter that will end tomorrow." He explained, "Both sides have been under high pressure for five months and need to take a breath. They are extremely tired and stressed in clearing out opposition forces and working to restore national order, so it is expected that such a thing will happen." In addition, Errol also made a clear statement: "Trump is bound to win, he is the president-elect, so I think Elon made a mistake."

Navarro, a trade adviser to U.S. President Donald Trump, dismissed Trump's public feud with Musk as insignificant, saying Musk was just "a special government employee who leaves when his term expires." "People come and go in the White House," Navarro said. Navarro also criticized Musk's long-standing opposition to tariffs, which are at the center of Trump's trade policy. "Musk doesn't like tariffs, that's all," he said, something Musk has "made clear" since Trump's first term. "We can disagree on this, but I would just say that during my first term, all those who said that tariffs would lead to recession and inflation were clearly dead wrong," Navarro said.

After Musk's public quarrel with Trump, Dmitry Novikov, first deputy chairman of the Russian State Duma for international affairs, said that Russia might offer Musk political asylum."If he does (need asylum), of course, Russia can provide it." Kremlin spokesman Dmitry Peskov said earlier in a call with reporters that the dispute was an internal matter of the United States and that the Kremlin believed Trump "would handle the situation himself."

A spokesman for the European Commission quipped that Elon Musk was "very popular" in Europe, AFP reported on June 6. Previously, the billionaire unexpectedly had a public dispute with US President Donald Trump. European Commission spokeswoman Paula Pinho was asked at a daily press conference whether Musk had contacted the EU to discuss relocating his business or setting up a new one. She smiled and replied: "He is very popular."

3. Will Musk return to the White House?

Judging from the current attitudes of both sides, it is unlikely that Musk will return to the White House during Trump's term.

On Saturday, Trump said in an interview with NBC News that his relationship with Musk was over. "Yes, I think so," When asked if he hoped to repair the damaged relationship, he replied "no".

Vice President JD Vance said Musk has "completely lost his mind" and may never be welcome again.

Vance noted that it was a "big mistake" for the Tesla and SpaceX CEO to attack the president.

Trump said in an interview with NBC News on Saturday that Musk was "disrespectful to the office of the presidency." "I think that's a very bad thing to do because he's very disrespectful. You can't disrespect the office of the presidency."

Last year, Musk donated about $250 million to Trump's presidential campaign. However, he hinted during the social media war that he might support some of Trump's opponents in next year's midterm elections - offering support to challengers of lawmakers who supported Trump's tax bill.

When asked about the prospect of Musk supporting Democratic candidates running against Republicans, Trump said he would face "serious consequences."

Musk wrote on X: "Trump has 3.5 years left in his presidency, but I have more than 40 years."

Fourth, is Tesla facing a major crisis?

As the war of words between the two continued to escalate, Tesla's stock price plummeted 14% on June 5, and then slowly rebounded.

In April this year, Tesla announced that its first-quarter car sales fell by 20%, its profits plummeted by more than 70%, and its stock price also fell. Apart from the unsatisfactory operating conditions of Tesla due to the distraction of energy after entering the White House, Tesla may have other shortcomings.

First, it seems to have fallen behind in autonomous driving:

Veteran technology reporter Kara Swisher pointed out: "Tesla is a great car company. They can compete in the field of self-driving taxis, but they are far behind."

Tesla has long been trying to catch up with its competitor Waymo, which is affiliated with Google's parent company Alphabet. Its driverless taxis have been driving on the streets of San Francisco for many years and are now operating in more cities.

Second, he is unable to focus on making cars:

"When he focuses on something, he is a very powerful man," said Ross Gerber, president and CEO of Gerber Kawasaki Wealth and Investment Management."Before, he had to prove to the world that he could build electric cars - a technology that no one else could do. Now, he has to prove that he can build rockets. He has a lot to prove." "But he thinks he has more power than the President of the United States, which may be the stupidest thing."

Currently, SpaceX has a pivotal position in the U.S. space and national security agencies. After Trump quarreled with Musk, representatives of NASA and the Pentagon called on Space X's competitors to speed up the development of alternative rockets and spacecraft. "Government officials have contacted at least three commercial aerospace companies: Rocket Lab, Stoke Space and Blue Origin, to find out the status of their rockets and when they can be used for government missions." Musk previously said that the flight of the Dragon spacecraft might be stopped. This would prevent NASA from sending astronauts to and from the International Space Station. Musk later gave up the threat. However, his statement caused concern among NASA officials who handed the safety of astronauts to Space X. The Pentagon also relies heavily on the company to launch its key satellites.

Third, anger from the public:

Protests have broken out every weekend across the country since Trump took office, collectively known as #TeslaTakedown. "He shouldn't be deciding the fate of our democracy by gradually dismantling our government. This is not right." Protester Linda Koistinen pointed out.

Joan Donovan, co-organizer of the #TeslaTakedown protest, pointed out: "He bought Twitter to increase his influence so that he can influence hundreds of millions of people at any time."

V. What is the impact on the crypto market?

On June 6, when the quarrel between the two was heated, DOGE, which Musk had strongly endorsed, plummeted 15% from its high point on June 3.

Meme coin Trump was not immune to the disaster. On June 6, Trump plunged 17.5% from its high point on June 4. Trump endorsed the view that his official Memecoin (TRUMP) is an indicator of public political sentiment. Industry insiders pointed out that the short-term price fluctuations of Memecoin are driven by speculation, but the long-term trend may reflect the public's expectations of Trump's political prospects.

The heated dispute between Musk and Trump has spawned a meme coin called KILL BIG BEAUTIFUL BILL, which has a market value of more than $53 million as traders have joined in the hype. Hours after Musk publicly criticized the bill, Pump.Fun traders seized the opportunity and launched a meme coin called KILL BIG BEAUTIFUL BILL (KBBB). KBBB's market value soared to $53.12 million in just nine hours as traders rushed in, but as of press time, trading in the token has basically returned to silence.

In the future, if the differences between the two escalate further, the crypto market does not rule out the possibility of black swan events.

Appendix: What does Trump's "big and beautiful" bill say?

On May 22, 2025, the Republicans in the U.S. House of Representatives passed a comprehensive tax and spending bill by a narrow margin. The bill includes extending the tax cut period, increasing federal benefit eligibility requirements, and raising the national debt ceiling.

The more than 1,000-page bill is now on the Senate floor, which will have a chance to approve or amend its provisions before it reaches Trump.

Here are some of the key elements of the bill.

Social Security tax exemption

During the campaign, Trump proposed eliminating taxes on Social Security income — the monthly benefit given to the disabled and elderly.

The House bill falls short of that promise, but does temporarily increase the standard deduction to $4,000 for individuals 65 and older. The deduction would be in effect from 2025 to 2028.

The deduction would start to taper off after $150,000 for married taxpayers filing jointly and $75,000 for single filers.

More Medicaid Requirements

To help fund tax cuts in other areas, Republicans added additional restrictions and requirements to Medicaid, the health care program that millions of seniors, disabled and low-income Americans rely on.

Changes to Medicaid, one of the largest components of federal spending, have been a major source of political conflict, leading to major divisions among lawmakers.

One of the changes is a new work requirement for childless adults without disabilities. To qualify, they must work at least 80 hours per month starting in December 2026, the bill states.

Another change to the program is that the requirement to re-enroll will be changed from once a year to every six months. Enrollees will also have to provide additional proof of income and residency.

Raising the SALT Tax Cap

The bill raises the deduction limit for state and local taxes (SALT), a very important issue for a handful of Republican holdouts in some Democratic-controlled urban areas.

Currently, the amount taxpayers can deduct from their federal taxes is capped at $10,000. That cap expires this year.

In the new bill, House Republicans would raise the SALT limit to $40,000 for married couples making up to $500,000.

That, too, has been a major point of contention.

A law passed in 2017 by the previous Trump administration set the cap at $10,000 in an effort to make room in the federal budget for tax cuts elsewhere.

Snap Benefits

The Supplemental Nutrition Assistance Program (Snap), a government program used by more than 40 million low-income Americans, also gets a makeover.

The new bill requires states to put more money into the program, which is also partially funded by the federal government.

It also adds work requirements for able-bodied Snap enrollees without dependents.

No tax on overtime pay, tips and other expenses

The bill fulfills one of Trump's signature campaign promises - to eliminate taxes on tips and overtime pay. Both promises were successfully made into the bill.

The plan will also allow Americans to deduct interest on car loans only for cars made in the United States.

The child tax credit will also be increased from $2,000 to $2,500 by 2028.

In addition, the bill proposes raising the debt ceiling to $4 trillion (£2.9 trillion). The debt ceiling is the limit on the amount of money the government can borrow to pay off its debts.

Raising the debt ceiling allows the government to pay for projects that Congress has already approved.

Sources: Golden Finance, BBC, Jinshi Data, X, Sina Finance, Yahoo Finance, CoinGecko