Bitcoin, crypto market decline as Senate passes President Trump's Big Beautiful Bill

Bitcoin (BTC) is down 1.5% in the early Asian session on Wednesday as the crypto market saw a downturn following fresh political tensions between US President Donald Trump and Tesla CEO Elon Musk over the "One Big Beautiful Bill," which narrowly passed the Senate.

Bitcoin, altcoins retreat as Big Beautiful Bill moves past Senate

President Donald Trump's One Big Beautiful Bill (OBBB) narrowly passed the Senate on Tuesday following a 51-50 vote by lawmakers. The voting process ended with a tie-breaker from Vice President JD Vance after more than 24 hours of debate.

The bill now heads back to the House — where it was first introduced — for a review of the amendments made by Senate lawmakers as Trump's July 4 deadline for the bill to reach his desk approaches.

The One Big Beautiful Bill Act is a tax and spending legislation spearheaded by Trump, which combines tax cuts, spending initiatives, and policy changes to extend tax legislation from his previous administration. The bill has received criticism from politicians for its potential to raise the US debt ceiling by $3 trillion.

It also stirred a new wave of criticism from Elon Musk, which reignited tensions between the Tesla CEO and Trump on Tuesday.

Musk reiterated his view on the bill's potential impact on the US national debt, adding that he could form a third political party in the US if the bill passes the Senate.

Trump brushed off the criticisms, claiming they stem from the bill's elimination of electric vehicle (EV) tax credits, which currently benefit Musk's companies.

"Elon Musk knew, long before he strongly endorsed me for president, that I was against EV mandate," Trump wrote in a Truth Social post on Monday.

Trump also proposed that the Department of Government Efficiency (DOGE), which Musk spearheaded earlier in the year, be used to strip those subsidies from the Tesla CEO's businesses, claiming the move would save the US "a fortune."

The reignited feud between Trump and Musk has led to a 4% decline in the crypto market in the past 24 hours. Bitcoin fell to the $105,000 level, dropping 1.5% on the day following a brief rise to $108,700 on Monday.

Major altcoins Ethereum (ETH), XRP, and Solana (SOL) also declined 3.2%, 3% and 4%, respectively, due to the rising political tensions. Notably, the meme coin sector was mildly affected by the development as major tokens Dogecoin (DOGE), Shiba Inu (SHIB), and PEPE declined 4%, 2% and 4%, respectively.

Artificial intelligence (AI) tokens were also weakened by the political developments, with top tokens Bittensor (TAO), Near Protocol (NEAR), and Internet Computer (ICP) facing declines of 4%, 4% and 3%, respectively.

While the market has been down since the bill's passage, analysts at The Kobeissi Letter noted that its impact could lead to a rally in risk assets in the long run, considering it could help calm the bond market and allow the Federal Reserve (Fed) to cut rates.