Stocks and Bitcoin Tumble, Feds wary of Stablecoins, Investors Eye Gold

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Bitcoin fell below $30K while nearly two dozen top stocks tumbled 30% or more from 52-week highs, as the entire crypto market lost $89 billion, investors are eying gold, while Fed casts a wary eye on stable coins.

Nearly two dozen stocks down 30% or more from 52-week highs

A number of top stocks, including Carnival (-37.3%), Zoom (-41.3%), Baidu (-50.5%), Peloton (-31.8%) and United Airlines (-31.8%), plummeted 30% or more, falling from a 52-week highs on S&P 500 or the Nasdaq-100, MarketWatch reported.

Others on the list included Discovery (-64.5%), ViacomCBS (-61.3%), Norwegian Cruise line (-36.5%), Citrix systems (-34.6%), Trip.com (-36.1%) and Royal Caribbean Group (-30.0%).

Bitcoin drops below $30K, while $89 billion wiped off the crypto market

The entire cryptocurrency market lost $89 billion in 24 hours as of 6:29 a.m. E.T. on Tuesday, according to CoinMarketCap data, on the back of bitcoin falling below $30,000 for the first time since June 22, dragging other digital coins lower, CNBC reported.

Bitcoin was down more than 5%, Ether dropped over 6%, and XRP fell nearly 9%, according to CoinDesk data.

Despite these downturns, Bitcoin is up 1.87% over the year, while Ether and XRP are both up roughly 135%.

Fed is casting a wary eye on stablecoin

Given the volatility of bitcoin and other cryptocurrencies, U.S. Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell have focused on another type of crypto called stablecoins, Bloomberg reports.

However, the Feds worry that the very usefulness of stablecoins creates risks for consumers and even for the financial system. Many see stablecoins as the pivotal piece that will force central banks to engage in the digital currency business themselves. They are essentially a bridge between cryptocurrency and traditional finance. Already, stablecoins top the market value of 100 billion in May.

With this revelation, Yellen calls financial regulators to “act quickly” in drafting rules for stablecoins. One reason is that stablecoins are poised to become another asset, like the U.S. dollar. 

In that scenario, issuers would back up the coin’s value by holding on to that asset.

However, what worries the Fed is that without proper regulation, consumers won’t be protected. Additionally, vast amounts of U.S. dollar-equivalent coins are being exchanged without touching the U.S. banking system, which could blind regulators to elicit financial transactions.

Investors are eying gold as stocks and bitcoin tumble

Some investors believe a market crash is coming; they see stocks, crypto coins, and digital currency as a “very dangerous” business right now. Former Prudent Bear Fund manager and now an advisor to the AdvisorShares Ranger Equity Bear ETF David Tice spoke to CNBC, Kitco reported. 

“We are adding debt as we’ve never seen,” Tice said. “We have the Treasury market acting very strange with rates falling dramatically…this is a dangerous market.”

On July 19, CNN’s Fear & Greed Index was at 19, “Extreme Fear,” and fell to 17 later in the morning. As of early a.m. on July 20, the index was at 18.

According to Tice, gold is the place to be. 

“You look at this lack of discipline in monetary and fiscal markets,” Tice said. “Gold is truly the place to be. Over 5,000 years, gold and silver do very well as protection against fiat money.”

“I would be owning gold, especially gold and silver mining companies,” Tice continued. “These companies have never been cheaper. Many are at single-digit multiples yet have potentially 15 to 20% growth rate in earnings even with this flat gold price.”