Dogecoin falls 10% as Elon Musk severs ties with the Trump administration

Dogecoin ( DOGE ) has fallen 10% today, with weekly losses reaching 22%, after Elon Musk officially left the administration of Donald Trump and severed ties with the Department of Government Efficiency ( D.O.G.E ).

DOGE price chart| Source: Bitcoin MagazineThe collapse comes amid a brutal political brawl between Elon and the sitting President of the United States, and it has dragged the once-popular memecoin deep into the red.

The drama began earlier this week when Elon criticized Trump's latest spending bill. The President did not remain silent. He responded by withdrawing NASA's nomination of Jared Isaacman, Elon’s long-time business ally, whom he wanted to lead the United States' space exploration efforts. This withdrawal shattered the peace between them.

Trump threatens to cancel the contract, Musk responds by shutting down Dragon

By Thursday, this had turned into a full-blown public war. Trump told the press that he was "very disappointed" in Elon.

A few hours later, Elon fired back on X, writing: "Trump will lose the election without me." Shortly after, Trump responded: "THAT'S CRAZY."

Trump threatened to cancel federal contracts held by Elon’s company. This threat immediately impacted the market as Tesla's stock plummeted 14% before closing for the day. However, Elon still did not appear to be panicking.

He wrote on X: "Let's continue, make my day even better," then announced that SpaceX would begin shutting down the Dragon spacecraft program, the only American spacecraft that transports astronauts to and from the International Space Station.

There is no direct mention of Dogecoin, but that doesn't matter. This memecoin has never been tied to any real-world value or asset. Instead, it operates based on vibes, hype, memes, and most importantly, the influence of Elon. That's why this political chaos has such a heavy impact on DOGE.

Elon leaving Washington means that his influence is waning and DOGE holders are being affected. In 2022, Dogecoin rose 15% in one day after Tesla accepted payments for goods using this memecoin.

In 2023, Elon replaced the Twitter logo with a Shiba Inu dog, Dogecoin's mascot, and the price has skyrocketed by more than 30%.

Currently, Elon has left the Trump administration and contracts are under threat, along with the price of DOGE collapsing.

Looking back to November 2024, after Trump's victory, Dogecoin surged in price along with other projects like Bitcoin, as traders anticipated an environment with friendly regulations.

That optimism has now faded. With Elon leaving and pressure from the government increasing, buyers are paying the price for betting on the "close relationship" between them.

Vincent