Musk Supports Trump, But Predicts Cryptocurrency Prices Will Drop?

Today, Bitcoin prices have plummeted significantly, reaching a low of nearly **$96,000**, triggering market panic, with over **$205 million in long positions liquidated** within an hour. Against this backdrop, Tesla CEO Elon Musk's remarks have once again become the focus. While supporting Trump, he predicts that cryptocurrency prices will further decline, sparking heated discussions.

Musk's Viewpoint: Strengthening Dollar Purchasing Power Weakens Crypto Value

• Support for Trump's New Government Efficiency Department:

Musk stated that if the newly established government efficiency department can effectively control inflation by cutting government spending and enhancing dollar purchasing power, then the relative value of cryptocurrencies will decrease, and prices may continue to decline.

• Opposition to Excessive Spending, Advocating for Fiscal Restraint:

Musk has repeatedly expressed concerns about the U.S. debt issue and excessive spending. He supports the establishment of a department focused on cutting expenditures, hoping to alleviate inflationary pressures through this action.

• Indirect Impact of the Government Efficiency Department on the Crypto Market:

The abbreviation of this department happens to be similar to "Dogecoin" (DOGE), and this "coincidence" has even sparked traders' expectations for short-term fluctuations in DOGE prices in the market.

Market Sentiment: Panic Selling After Failed Bets

Previously, due to Musk supporting Trump, the cryptocurrency market soared on positive expectations, especially Bitcoin and Dogecoin. However, as Musk's statements deviated from optimistic expectations, market sentiment took a sharp downturn, and a large amount of capital betting on Trump's rally quickly withdrew.

• Significant Fluctuations in Bitcoin Prices: Falling from a high point to near **$96,000**.

• Long Liquidations: Fund outflows led to massive liquidations in leveraged trading, further exacerbating market selling pressure.

Future Outlook: How to Interpret Musk's Predictions?

1. Short-Term Pressure Remains: If Trump's team truly takes effective measures to reduce inflation, the strong dollar will suppress the cryptocurrency market.

2. Long-Term Value Unchanged: Although Musk predicts a decline, the long-term value logic of cryptocurrency as a decentralized asset remains unchanged.