The US is starting to dominate Bitcoin holdings globally, changing everything about crypto trading in the USA. This is causing a mix of excitement and worry among traders and investors. With institutional demand on the rise and clearer regulations coming into view, US entities are buying more Bitcoin than ever. Let's dive into the potential effects this might have on market stability and future trends.

US Holds More Bitcoin Than Offshore Players

Bitcoin reserves owned by US-based entities have surged, surpassing those held offshore for the first time. Data from CryptoQuant shows that as of January 9th, the reserve share of US-based entities hit an all-time high—now 65% more than what's held offshore. This dominance change reflects a notable rise in institutional demand and better regulatory clarity in the US.

According to CryptoQuant, the number of Bitcoin reserves held on US exchanges is increasing compared to those held offshore. The ratio shot up from 1.24 in September 2024 to 1.66 in December, remaining steady at 1.65 as of January 2025. In other words, for every Bitcoin kept offshore, US entities are now holding 65% more.

This metric includes Bitcoin held by big US players such as corporations like MicroStrategy, spot BTC ETFs, exchanges, miners, and the US government. This shows how much US institutions and the government are starting to influence the Bitcoin market.

This increase in US Bitcoin has come amidst a promising price rally. Back in September 2024, when Bitcoin was trading around $60K, offshore entities held more reserves. Now that Bitcoin is soaring past $100K—hitting an all-time high of $108,135—US reserves have become the majority.

Companies like MicroStrategy are at the forefront of this trend. They publicly disclosed a purchase of 1,070 BTC between December 30 and December 31, 2024, averaging $94,004 per Bitcoin. This brings MicroStrategy’s total Bitcoin holdings to 447,470 BTC, worth about $28 billion, which makes up 2.1% of Bitcoin's total supply.

MicroStrategy’s aggressive strategy of acquiring BTC, funded by convertible note sales, shows that US institutions are eager to treat Bitcoin as a reserve asset.

The launch of spot BTC ETFs in January 2024 has fueled this increase in US-held Bitcoin reserves. According to Sosovalue, these ETFs have attracted $106.8 billion in inflows so far, providing a regulated way for both institutional and retail investors to access Bitcoin.

The combination of US-listed ETFs and clearer regulations has created a favorable environment for institutional adoption, solidifying US entities’ grip on Bitcoin ownership.

Market Corrections and Future Outlook

Still, despite all this good news, Bitcoin has gone through a healthy price correction after exceeding $100K. Bitcoin's price fell back to $93,000 after dipping to $92,500, which was driven by fears of the Federal Reserve tightening policies next year.

According to CoinGlass, this correction led to $521 million in liquidations, with $345 million from long positions. The sell-off was worsened by hotter-than-expected US job data, which showed JOLTS job openings rising to 8.1 million when only 7.74 million were expected. The strength in the labor market sparked risk-off sentiment, causing long-term bond yields to rise and pushing risky assets like Bitcoin lower.

CryptoQuant’s Julio Moreno said the price correction is "healthy", noting that traders have seen their unrealized profit margins shrink, which is expected after a strong rally. Analysts consider $95K as a critical support level, which could set Bitcoin up for the next rally.

With institutional interest still high and US entities aggressively acquiring Bitcoin, the long-term outlook remains bullish. This ongoing dominance of US entities in Bitcoin ownership marks a new phase in the cryptocurrency's evolution, underscoring how institutional adoption and regulations are shaping the market.

Bold Predictions and Market Dynamics

And speaking of future outlooks, Bitcoin’s always been known for bold predictions, and Timothy Peterson has just made another one. The network expert and author of the ground-breaking Metcalfe’s Law paper, has set a high bar for Bitcoin’s long-term potential. He took to X on January 8 to predict Bitcoin will reach an astounding $1.5 million each by 2035.

His prediction is based on Metcalfe’s Law, which correlates a network's value with the square of its number of users—meaning Bitcoin will grow alongside its global adoption.

“The year is 2035. Bitcoin is at—and you can hold me to this—$1.5 million,” Peterson said, hinting at how Bitcoin's network would strengthen.

Peterson’s not one to back down without proof. He previously had predicted that Bitcoin’s value could only be understood through network connectivity, rather than traditional metrics. He’s always claimed Bitcoin is set for exponential growth.

He’s called it right before. In 2020, his “Lowest Price Forward” indicator predicted Bitcoin wouldn't trade below $10K again—which has proved accurate. Last year, he predicted Bitcoin’s local price bottom in September to within eight days, further solidifying his stature in the crypto space.

He reiterated his confidence in Bitcoin's trajectory again on January 2, describing the market conditions as “nothing special,” and said Bitcoin’s long-term value far outweighs its short-term price swings.

Peterson’s long-term take on Bitcoin suggests a bright future, but the near-term outlook is murky. Bitcoin is around $93,535, and market sentiment is mixed as it consolidates after a bullish Q4 in 2024.

Keith Alan, co-founder of Material Indicators, summed it up perfectly: “This dip isn’t done dipping.” He pointed out how Bitcoin's price is being suppressed, with buyers waiting for lower entry points at $86,500, representing a possible future 20% correction from the recent all-time high of $108,135.

Alan also noted the chance of Bitcoin filling a CME gap at $77,900, highlighting significant downside risk before the next bullish rally.

Summary: The Future of Bitcoin is Here

As the inauguration of US President-elect Donald Trump approaches, the effect on Bitcoin's market dynamics is intriguing. Market watchers are curious about policies that may affect Bitcoin's direction, especially with institutions influencing prices.

Institutions have helped fuel much of the rally, with US ETFs and corporate treasuries amassing substantial reserves. These changes push Peterson's thesis forward—Bitcoin’s value will grow alongside its adoption.

Peterson's prediction of $1.5 million per Bitcoin by 2035 is a strong signal of Bitcoin’s transformative potential. It’s a reminder of how much Bitcoin has changed and what it could still do.

But as with any investment, the path to Peterson’s target will not be smooth. Market corrections, regulatory changes, and macroeconomic factors will keep stirring the pot. For traders and investors, this means finding a balance between belief in Bitcoin's future and a clear view of its current challenges.