Dogecoin Drops Over 9% On Friday Morning: What's Going On?

Kaustubh Bagalkote

June 06, 2025

Dogecoin (CRYPTO: DOGE) tumbled 9.14% to $0.1726 on Friday as a public dispute between President Donald Trump and Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk sent shockwaves through cryptocurrency markets.

The meme cryptocurrency, which features a Shiba Inu logo and was created by Billy Markus and Jackson Palmer in December 2013, dropped alongside broader crypto selloffs that saw Bitcoin (CRYPTO: BTC) fall 0.98% to $103,793 and Ethereum (CRYPTO: ETH) decline 5.08% to $2,75, as of 6:11â€¯am Eastern Time. Total crypto market cap fell 3.77% to $3.18 trillion.

The market turbulence coincided with escalating tensions between Trump and Musk after the Tesla CEO criticized the president’s spending bill as a “massive, outrageous, pork-filled Congressional abomination” on social media. Trump retaliated by threatening to terminate billions in government contracts and subsidies for Musk’s companies, including Tesla and SpaceX.

"The sharp moves in TRUMP and DOGE demonstrate just how quickly political drama can move markets, especially when tied to cryptocurrencies with strong narrative-driven communities," said Jordan Major, author of the Finbold research. "As crypto markets mature, we're seeing them become more sensitive to real-world political headlines, and this latest episode is a prime example of that dynamic in action."

See Also: Larry Summers Identifies 3 Key Reasons For Rising US Debt, But Doesn’t Think Trump’s ‘Big Beautiful Bill’ Is The Medicine The Country Needs

Why It Matters: Tesla shares plunged 14.3% on Thursday following Trump’s threats, but recovered 5.02%, trading at $298.9 in pre-market trading on Friday. Musk had departed his role as senior adviser at the Department of Government Efficiency just days before the public confrontation escalated.

Dogecoin’s price sensitivity to Musk-related developments stems from the billionaire’s historical influence over the token. Musk began tweeting about Dogecoin in early 2021, calling it his “favorite coin” and triggering massive rallies culminating in his Saturday Night Live appearance.

The selloff triggered massive liquidations across crypto markets, with 226,781 traders liquidated in 24 hours totaling $979.88 million in forced position closures.

Read Next:

Investors Pay The Price As Musk-Trump War Of Words Escalates: Once Allies, Now Foes, Their Linked Stocks, Crypto And Funds Wipe Out $155 Billion In A Single Day

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image Via Shutterstock

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