USDC whale stock percentage lowest in nearly two years

The percentage of USD Circle (USDC) stablecoins held by major wallet addresses has fallen to its lowest point in nearly two years as the cryptocurrency market slowdown continues.

Cryptocurrency analytics firm Glassnode has released the latest USDC metrics data, reflecting a recent selloff of the second-largest US dollar-backed stablecoin by market capitalization.

As Cointelegraph previously reported, sanctions imposed on cryptocurrency mixer Tornado Cash by the US Treasury Department have had a marked effect on the capitalization of USDC and its biggest competitor, Tether (USDT).

While USDT markets grew by nearly $2 billion in the days following the sanctions, USDC’s market cap shrank after its issuer Circle decided to freeze some 75,000 tokens. USDC held by addresses linked to Tornado Cash.

Related: Independent Tether Attestation Reveals 58% Decrease in Commercial Paper Holdings

Various commentators have suggested that some users have moved funds from USDC to USDT, given the correlation between the decline and growth in the market capitalization of the respective stablecoins. Data from Glassnode shows that the percentage of USDC held by the top 1% of addresses hit a 22-month low of 87.667%.

While on-chain data shows that there has been some USDC selling over the past fortnight, metrics released by Glassnode on August 22 showed that the seven-day moving average of exchange deposits from the USDC also hit its lowest point since March 2021.

While USDC’s market capitalization may be down, the stablecoin hit a three-year high in average weekly trading volume, surpassing the previous high recorded in June 2022.

USDC had been touted as the best stablecoin of 2022 by market cap in July 2022, coming within $11 billion of Tether’s market cap. This percentage has eroded since the Tornado Cash debacle.

Tether remains silent on blacklisting or freezing USDT tokens linked to the sanctioned mixer. Cointelegraph has reached out to the stablecoin operator to find out if it will follow Circle’s lead in freezing assets linked to Tornado Cash addresses, given the potential legal ramifications.