The percentage of USD Circle (USDC) stablecoins held by major wallet addresses dropped to its lowest point in almost two years as the cryptocurrency market downturn continues.
Cryptocurrency analytics firm Glassnode has released the latest data on USDC metrics, reflecting a recent sell-off of the second biggest U.S. dollar-backed stablecoin by market capitalization.
$USDC Percent Supply Held by Top 1% Addresses just reached a 22-month low of 87.667%
Previous 22-month low of 87.669% was observed on 20 August 2022
View metric:https://t.co/EU57HUtLdu pic.twitter.com/dG7Qj1bAjF
— glassnode alerts (@glassnodealerts) August 22, 2022
As Cointelegraph previously reported, sanctions imposed on cryptocurrency mixer Tornado Cash by the U.S. Treasury Department had a marked effect on the capitalization of both USDC and its biggest competitor, Tether (USDT).
While USDT markets saw growth of almost $2 billion in the days following the sanctions, USDC’s market cap shrunk after its issuer Circle decided to freeze some 75,000 USDC tokens 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 shifted funds from USDC to USDT, given the correlation in the decline and growth of the respective stablecoins’ market cap. Data from Glassnode shows that the percent of USDC held by the top 1% of addresses reached a 22-month low of 87.667%.
While on-chain data shows that there has been a sell-off of USDC over the past fortnight, metrics released by Glassnode on Aug. 22 showed that the seven-day moving average of USDC exchange deposits also reached its lowest point since March 2021.
$USDC Number of Exchange Deposits (7d MA) just reached a 17-month low of 138.250
Previous 17-month low of 138.810 was observed on 23 March 2021
View metric:https://t.co/yhG6sKrvi6 pic.twitter.com/tB9ZoQVs7j
— glassnode alerts (@glassnodealerts) August 22, 2022
While the market cap of USDC might be down, the stablecoin reached a three year high in terms of weekly mean transaction volume, surpassing the previous high registered in June 2022.
$USDC Mean Transaction Volume (7d MA) just reached a 3-year high of 228,721.050 USDC
Previous 3-year high of 226,056.588 USDC was observed on 19 June 2022
View metric:https://t.co/VUwnIn7YLP pic.twitter.com/FDrgkDUIuZ
— glassnode alerts (@glassnodealerts) August 22, 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.