Elon Musk's New Party Shakes Up Tesla and the Crypto Market

Elon Musk, the billionaire famous for his unpredictable moves, has once again stirred up both the political and financial worlds with his announcement over the weekend of forming a third U.S. political party, the "American Party." However, this time, the market's reaction was not at all positive, with a clear message sent from investors on Wall Street.

During Monday's trading session, Tesla's stock (TSLA.O) plummeted by nearly 7%. This sharp decline wiped out approximately $15 billion from Elon Musk's net worth in a single day, pulling his fortune down from $405 billion to $391 billion, according to Forbes estimates. Despite this, he still maintains a safe distance of over $100 billion from the world's second-richest person.

The reason for this sell-off is believed to stem from investor concern. They fear that this politically confrontational act could cause his companies, especially Tesla, to lose important federal subsidies due to conflict with President Trump, thus facing more obstacles in their business operations. This context is even more concerning given that Tesla's stock had already fallen a total of 31% since Trump took office in January of this year.

Tesla's drop is not just Wall Street's own story. With Elon Musk's deep influence, fluctuations surrounding him always create ripple effects that spread to the crypto market. The "key person risk" associated with Musk is a factor that crypto investors must always watch for. His past tweets have, on multiple occasions, moved the price of Bitcoin and especially Dogecoin.

Furthermore, Tesla is one of the largest corporate holders of Bitcoin in the world. Financial pressure on Tesla could, in a worst-case scenario, force the company to reconsider its treasury strategy, including whether to continue holding its massive amount of crypto assets. Any sell-off from Tesla could create significant selling pressure on the market.

The message sent by the market seems very clear: stakeholders would prefer the billionaire to stay away from political confrontations in Congress and refocus on the "factory floor"—where technological and product innovations are made. While the "American Party" may or may not impact the U.S. political scene in the future, its immediate effect on investor sentiment has been definitively negative.