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

source: Words Li Huawai

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

So I also searched for this big melon, and the general process was that Trump continuously posted posts on his social platform (Truth Social) to bombard Musk, as shown in the figure below.

And these statements seem to infuriate Musk, so then there is the tweet that many people on the Internet have seen today, that is, Musk tweeted that Trump appeared in Epstein's documents, which is the real reason why these documents have not been made public. This is shown in the figure below.

feelings of the bigwigs are sometimes really incomprehensible, and the two people who were sympathetic to each other some time ago have now begun to target each other and expose the truth on the Internet, and this tangible "war" between them seems to have a direct impact on the financial market, and the three major stock indexes fell together at the close of the US stock market, and Tesla's stock fell sharply 14.26%, as shown in the figure below.

1. The battle between Trump and Musk

This seems to be a relatively interesting "war", and it belongs to the "war" between two of the richest and most powerful people on the planet, although at the moment these two are only using social platforms to quarrel, let's not ignore the potential impact of such a quarrel, which may continue to ripple into the financial markets (including the crypto market) in ways we don't expect.

In fact, since Trump took office, we have seen his ego many times, and his seemingly simple words (a single tweet) can send the market by earthquake, but who will be hurt in the end? It still seems to be a large number of retail investors.

Let's move on to the crypto market, because of the battle between Trump and Musk, the crypto market also had some pullbacks today, especially the DOGE representing Musk fell by nearly 10% in a single day, and TRUMP representing Trump was also the same.

HOWEVER, AS WE MENTIONED IN OUR PREVIOUS ARTICLE, BECAUSE OF ALL KINDS OF UNCERTAINTIES IN THE MARKET, THERE WILL ALSO BE VARIOUS OPPORTUNITIES, AND IT IS SAID THAT SOME PEOPLE ARE ALSO SENSITIVE TO THIS MATTER AND MAKE MONEY BY SHORTING DOGE AND TRUMP, BUT THIS KIND OF MONEY IS NOT SUITABLE FOR MOST PEOPLE, SO WE DON'T NEED TO BE TOO ENVIOUS, JUST CONTINUE TO MANAGE OUR POSITIONS ACCORDING TO OUR OWN TRADING DISCIPLINE AND TRADING PLAN.

In this quarrel between Trump and Musk, Trump also threatened to cut off federal funds obtained by companies related to Musk, if this thing is really implemented, then it may also affect the R&D budget and policy support of some technology companies, and then affect the development of the technology field, after all, Musk has been at the forefront of science and technology in recent years (including satellites, clean energy deployment, etc.).

At present, the crypto market does not exist in isolation, it is actually greatly affected by the traditional economy (such as the U.S. stock market) and the macro situation, and the current bitcoin is hovering in the historical high area, if this thing continues to develop like this, superimposed on the existing macroeconomic situation is already relatively fragile, it may lead to further actions of large funds in order to hedge against risks, and the sell-off of technology stocks does not rule out that it will continue to spread to the crypto market. As a result of a new phased reversal of the already weak market structure, once this continues, then this battle between Trump and Musk is likely to evolve into a black swan event with a phased correction in the market this summer.

However, at present, there is also news on the Internet: it is said that Musk and Trump are considering reconciliation, and Musk himself seems to hope to ease the conflict. This is shown in the figure below.

In short, what we see may be true, maybe it is false, maybe it is what others want us to see, in fact, the world is made up of all kinds of true and false.

No matter how far the battle between Trump and Musk develops next, for us melon-eating masses, there have indeed been too many incredible experiences this year, and what we continue to experience now seems to be a "struggle" between the world's most influential people, whether it is a conspiracy, a farce, or a new crisis fuse, in response to this situation, what we need to do is actually very simple: to always be vigilant and protect our positions.

2. Is cryptocurrency turning into Trump's political weapon?

Last year (2024), when the market went crazy due to Trump's crypto-friendly attitude, Bitcoin also managed to break the $100,000 historical mark, and since Trump officially took office, his various statements and actions have brought more uncertainty to the market.

Judging from the events that have taken place so far, it seems that Trump is not only satisfied with the tariff trade war, but also wants to build a crypto empire of his own (the United States) at the same time

With the launch of the TRUMP token in January, Trump used his and the White House's influence to begin to penetrate the cryptocurrency market, announcing the establishment of a strategic Bitcoin Reserve and a digital asset reserve in March, followed by the direct establishment of a $2 billion stablecoin in April (USD1 stablecoin issued by World Liberty Financial, The market capitalization as of the time of writing is approximately $2.18 billion) ......

In the past, cryptocurrencies were seen more as a representation and symbol of freedom, decentralization, and non-governmentalism, but now, with the continued and deep participation of the most powerful people and major institutions (including the passage of BTC ETFs, etc.), it seems that cryptocurrencies have begun to slowly be controlled by traditional industry giants as a new financial weapon for them.

Although the total market capitalization of the cryptocurrency market is only $3.2 trillion, this does not prevent Trump and some institutions from making a lot of money, and at the same time, they can continue to use cryptocurrencies as a new weapon in the long term, guiding people in other countries and around the world to chase after them.

Let's continue to take World Liberty Financial (WLFI, a cryptocurrency company founded and backed by the Trump family), the USD1 stablecoin launched by WLFI can be understood to be backed by the Abu Dhabi government, that is, they received $20 investment in Abu Dhabi, and from another perspective, can we also understand that President Trump can get $2 billion from foreign governments simply through cryptocurrency?

This is still happening in the United States when the regulation of cryptocurrencies is still unclear, and it can be imagined that if the United States does officially pass the stablecoin bill this year (August is a key point in time), and stablecoins have a legal identity in the United States, then it is entirely possible that they will become a political weapon and a global harvesting tool for Trump.

Although theoretically, this is certainly good for the crypto market, because stablecoins are legal, then traditional funds (including qualified private companies that can also issue US dollar stablecoins, and are supported and protected by federal regulatory acts) can participate deeply in the crypto market without worry, which will continue to push up the price of cryptocurrencies such as Bitcoin to a certain extent. But at the same time, it is precisely because cryptocurrencies may become a political tool in the United States, which may involve new political and financial games between certain countries, which may become more difficult for many retail investors.

What the crypto market will look like in the future, I don't know, but Bitcoin, which once belonged to Satoshi Nakamoto, was "rebellious" and advocated complete freedom and decentralization, and at present, this "rebellious" core of Bitcoin seems to be slowly undergoing some changes, as it seems to be being used by Trump (the United States) as a new tool and one of Trump's means to achieve MAGA's goals.

The rules of the game seem to have begun to change, and Trump is a man who knows how to play the game better than anyone else. Those who had hoped that cryptocurrencies would be widely and freely "adopted", but at the moment it seems that cryptocurrencies are being "overtaken" by power and capital.

As for what we should do next, in fact, the best choice is still to continue to hold the cake in our hands and patiently grasp the opportunities of the big cycle. In short, this field is still a rare opportunity for many people, but it will also become more and more difficult for many people.