Dogecoin (CRYPTO: DOGE) tumbled on Friday as a public dispute between President Donald Trump and Tesla, Inc. (NASDAQ:TSLA) CEO Elon Musk threatened to cancel billions in government contracts and subsidies for Musk's companies.

What Happened: Dogecoin DOGE/USD traded at $0.1726, down 9.14%. The meme cryptocurrency, which is known for its Shiba Inu logo and was created by Billy Markus and Jackson Palmer in December 2013, dropped alongside broader crypto selloffs that saw Bitcoin BTC/USD fall 0.98% to $103,793 and Ethereum ETH/USD decline 5.08% to $2,751, as of 6:11 a.m. Eastern Time.

Total crypto market cap fell 3.77% to $3.18 trillion.

The market turbulence came as Trump and Musk engaged in a heated exchange on social media. The Tesla CEO criticized Trump's spending bill, which he described as a "massive, outrageous, pork-filled Congressional abomination."

In response, Trump threatened to terminate billions in government contracts and subsidies for Musk's companies.

"I will be terminating the STUPID trillions of dollars in subsidies and contracts that are being paid to, and collected by, his company in order to make products in China, and sell them in the United States, and I will be firing the chairman of the Federal Reserve, Jerome Powell, a Trump appointee who is a complete lunatic," Trump wrote on Truth Social.

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. 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.

— Finbold (@Finbold) August 11, 2023

The president's threats came after he announced plans for a new economic bill, which he described as "Big, Beautiful, and relatively painless, like a Band-Aid on a small cut."

However, Trump did not disclose any specific details about the bill's contents or how it would differ from the $4.6 trillion spending measure that he had previously proposed and which was passed by Congress with bipartisan support in November 2021.

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 stepped down from his role as senior adviser at the Department of Government Efficiency just days before the public confrontation escalated.

The billionaire had joined the administration in February, focusing on advising the government on improving efficiency and reducing the deficit.

His involvement in the Biden administration had sparked interest in a potential shift in policy towards cryptocurrencies, with some anticipating a more favorable stance from the Democratic president.

Why This Matters: Supporters of Dogecoin have pointed to Musk's role in the token's price surges and his ability to rally the crypto community.

Earlier this year, when Trump announced his candidacy for the 2024 presidency, a token named after the former president shot up in price.

The Trump token, which is a programmable token on the Ethereum blockchain, was created in December 2021. The token's ticker symbol is TRUMP, and it is designed to be a governance token that will allow users to vote on proposals for the Trump chain.

The token's price surged to a high of over $1,000 in January, but it has since pulled back to around $75.

The token's website describes it as "the official Trump token for the Trump chain, a new blockchain designed to support Trump's vision for a better, safer, and more prosperous America."

The token is also being used to fund the development of Trump chain products, such as a Trump wallet and Trump exchange.

"We are creating a Trump economic empire, one token at a time," the website says.

The Trump token is part of a broader trend of tokens being named after politicians and other public figures. For example, there are also tokens named after Biden, Obama, and Sanders.

These tokens are typically created by fans of the politicians or as a way to make a political statement. The tokens can be used to vote on proposals for the Trump chain, and they will also be distributed to supporters of Trump's political campaigns.

The Trump token is a governance token that will allow users to vote on proposals for the Trump chain, a new blockchain designed to support Trump's vision for a better, safer, and more prosperous America. The token is being used to fund the development of Trump chain products, such as a Trump wallet and Trump exchange. We are creating a Trump economic empire