USDC tokens held at the largest addresses have fallen to a two-year low as Circle Tornado freezes cash-related assets.

The share of USD circle stablecoins (USDC) held in major wallet addresses has fallen to its lowest level in nearly two years as the cryptocurrency market continues to collapse.

Cryptocurrency analytics firm Glassnode has released the latest USDC performance data, reflecting the recent sell-off of the second largest USD-backed stablecoin by market cap.

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

While USDT markets surged nearly $2 billion in the days after sanctions, USDC’s market cap fell after Issuer Circle decided to freeze around 75,000 USDC tokens held at addresses linked to Tornado Cash.

Also Read: Independent Tether Certification Shows 58% Drop in Commercial Paper Stockpiles

Various commentators suggest that some users have shifted funds from USDC to USDT given the correlation between the decline and rise in market cap of the respective stablecoins. Glassnode data shows that the percentage of USDC held by the top 1% hit a 22-month low of 87.667%.

While on-chain data shows that there has been a sell-off in USDC over the past two weeks, numbers released by Glassnode on Aug. 22 showed that the seven-day moving average of USDC bills also hit its lowest level since reached March 2021.

While USDC’s market cap may decline, the stablecoin hit a three-year high in terms of average weekly transaction volume, surpassing the previous high set in June 2022.

USDC has been touted to compete with USDT as the best stablecoin of 2022 by market cap in July 2022, and to approach Tether’s market cap in the $11 billion range. That percentage has declined since the Tornado Cash fiasco.

Tether is silent on whether it will blacklist or freeze USDT tokens associated with the sanctioned mixer. Cointelegraph has reached out to the stablecoin operator to see if it will follow Circle’s lead in freezing assets related to Tornado Cash addresses in light of potential legal ramifications.

Source: CoinTelegraph