As the cryptocurrency market continues to deteriorate, the percentage of USD Circle (USDC) stablecoins owned by big wallet addresses has plunged to its lowest level in nearly two years.
Glassnode, a cryptocurrency analytics firm, has provided the most recent statistics on USDC metrics, which suggest a recent sell-off in the second largest US dollar-backed stablecoin by market value.
As previously reported by Cointelegraph, the US Treasury Department's penalties against cryptocurrency mixer Tornado Cash had a significant impact on the capitalization of both USDC and its main competitor, Tether (USDT).
While USDT markets grew by nearly $2 billion in the days following the penalties, USDC's market cap shrank after its issuer Circle chose to freeze 75,000 USDC tokens held by Tornado Cash addresses.
Several observers have stated that some users transferred funds from USDC to USDT due to the correlation between the collapse and growth of the respective stablecoins' market capitalization. According to Glassnode data, the percentage of USDC held by the top 1% of addresses has reached a 22-month low of 87.667%.
While on-chain data suggests that USDC has been sold off over the last two weeks, measures released by Glassnode on August 22 show that the seven-day moving average of USDC exchange deposits has also reached its lowest point since March 2021.
While USDC's market cap is declining, the stablecoin has reached a three-year high in terms of weekly mean transaction volume, exceeding the previous peak set in June 2022.
USDC had been touted to contend with USDT as the top stablecoin of 2022 by market capitalization in July 2022, edging to within $11 billion of Tether’s market cap. This percentage has eroded since the Tornado Cash debacle.
Tether remains mute on whether it would blacklist or freeze USDT tokens linked to the sanctioned mixer. Cointelegraph has reached out to the stablecoin operator to ascertain whether it will follow Circle’s lead in freezing assets linked to Tornado Cash addresses, given the potential legal ramifications.