The Expensive Political War: Musk "Provokes", Tesla Loses 79 Billion USD

The feud between Elon Musk and former President Donald Trump has crossed political boundaries, beginning to have real effects on the financial markets. Tesla shares are plummeting, and Bitcoin prices are fluctuating – all of which are causing traditional investors as well as the cryptocurrency community to become concerned. Tesla stocks plummet sharply after political confrontation After Elon Musk publicly criticized Donald Trump's $5 trillion spending bill in June and launched a new political party called America Party, Tesla's stock plummeted by up to 14%. On July 7 alone, the stock fell an additional 6.8%, wiping out $79 billion in market value. The more concerning issue is what will happen next. With the Republican Party in control of all three branches of the U.S. government, investors are worried that Tesla may lose government incentives, especially the electric vehicle support policy. Not only Tesla, but SpaceX – the company that relies on federal contracts worth $22 billion – could also face similar risks if the Trump administration retaliates. Tesla's Bitcoin becomes a "ticking time bomb" Tesla currently holds 11,509 BTC, which was once valued at around 1.2 billion USD. However, with Bitcoin plummeting by 12% recently, this asset is now worth approximately 951 million USD. If Tesla's stock continues to plummet, Musk may be forced to sell part of the company's Bitcoin to raise capital – this could trigger a domino effect that further destabilizes the cryptocurrency market. How can Tesla shake up the Bitcoin market? From 2025, according to the new regulations of the Financial Accounting Standards Board (FASB), Tesla must disclose the market value of Bitcoin every quarter. In the first quarter of 2025, when the price of Bitcoin decreased to 93,000 USD, Tesla recorded significant losses. In contrast, in Q4/2024, when Bitcoin reached the milestone of 106,000 USD, the company recorded an additional profit of 600 million USD. Now, in the context of plummeting stocks and a market full of anxiety, all eyes are on Musk's next decision. If he chooses to sell BTC, it could cause a shock in the cryptocurrency market. But if he steadfastly holds on, it could be a stabilizing signal to reassure investors. What do experts say? Cryptocurrency analyst Nic Puckrin believes that the showdown between Musk and Trump was anticipated, but the media influence of both is increasing the volatility. If tensions escalate, the impact on the market will be even more severe. Meanwhile, investor Anthony Pompliano stated that Musk could use Tesla's Bitcoin as a financial shield against the possibility of Trump cutting electric vehicle subsidies. He believes that Musk's America Party has a pro-Bitcoin ideology, and Tesla is likely to hold or even increase its BTC holdings to ensure financial stability amid escalating tensions. Business is everything? The future of Tesla is under threat. While Musk is focusing on politics, Tesla is rolling out its robotaxi service in Austin, while facing strong competition from China's BYD. Many investors believe that Musk should concentrate on business strategy and technology instead of being distracted by politics. Although projects like SpaceX's Mars mission or xAI's AI are not affected by the stock market, Tesla – the public company – is different. Tesla's management is still supporting Musk, but they may call on him to refocus on business operations and find ways to smooth relations with the Trump administration. In summary: Musk's next decision will have a significant impact. If Musk decides to hold on to Tesla's Bitcoin, the cryptocurrency market may stabilize again. But if he is forced to sell, it could create a wave of sell-offs, pushing Bitcoin's price to plummet. As Tesla's fate is closely tied to Elon Musk's political moves, both traditional and cryptocurrency investors will continue to closely watch his every move.