Circle Led USDC Stablecoin Held by Large Whales Plummet

• The top 1% of addresses recently controlled 87.667% of all USDC.
• On-chain statistics show a sell-off of USDC over the previous two weeks.

As the bear market in cryptocurrencies continues, the share of USDC stablecoins owned by significant wallet addresses has fallen to its lowest level in over two years. Glassnode, a cryptocurrency data, and analytics company has just revealed new stats for USDC, which show a recent sell-off of the second largest U.S. dollar-backed stablecoin by market value.

The market value of USDC and its main rival, Tether (USDT), dropped significantly when the U.S. Treasury Department announced sanctions on cryptocurrency mixer Tornado Cash.

Although USDT markets grew by about $2 billion in the days after the sanctions, USDC’s market value fell as a result of issuer Circle’s decision to freeze around 75,000 USDC tokens owned by addresses associated with Tornado Cash.

U.S Sanction After Effect

Since the market capitalization of both stablecoins has fallen and risen at about the same rates, some observers have hypothesized that customers have transferred their money from USDC to USDT. According to research conducted by Glassnode, the top 1% of addresses recently controlled 87.667% of all USDC, marking a 22-month low.

Glassnode’s statistics, published on August 22nd, reveal that the seven-day moving average of USDC exchange deposits has hit its lowest position since March 2021, along with on-chain statistics showing a sell-off of USDC over the previous two weeks.

Although USDC’s market valuation is down, the stablecoins weekly mean transaction volume reached 3 year high. In July 2022, USDC’s market value came within $11 billion of Tether’s, prompting speculation that USDC will challenge USDT for the top stablecoin spot in 2022. Due to the Tornado Cash scandal, this proportion has dropped.

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