Top Cryptocurrency News: USDC Whale Holdings Percentage is at its Lowest in Almost Two Years

23-Aug-2022 By: Shikha Jha

As the cryptocurrency market continues to decline, the percentage of USD Circle (USDC) stablecoins owned by significant wallet addresses has plunged to its lowest level in almost two years.

Glassnode, a cryptocurrency analytics firm, has recently released the latest data on USDC metrics, which suggest a recent sell-off in the second largest US dollar-backed stablecoin by market value.

As CoinGabbar previously reported, the US Treasury Department's sanctions on cryptocurrency mixer Tornado Cash had a significant impact on the capitalization of both USDC and its primary competitor, Tether (USDT).

While USDT markets increased by over $2 billion in the days following the sanctions, USDC's market valuation shrank after its issuer Circle opted to freeze 75,000 USDC tokens owned by Tornado Cash addresses.

Several commentators have stated that some users transferred funds from USDC to USDT due to the correlation between the decline and rise of the respective stablecoins' market capitalization. As per 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 sell-off over the last two weeks, metrics 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 value is declining, the stablecoin has hit a three-year high in terms of weekly mean transaction volume, exceeding the previous peak set in June 2022.

In July 2022, USDC was expected to contend with USDT as the leading stablecoin by market capitalization, edging to within $11 billion of Tether's market value. This percentage has declined following the Tornado Cash debacle.

Tether has been quiet on whether it will ban or freeze USDT tokens tied to the sanctioned mixer. Given the potential legal repercussions, local media sources have reached out to the stablecoin operator to ascertain whether it will follow Circle's lead in freezing assets tied to Tornado Cash addresses.

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