The crypto market is expected to welcome a rebound in September, with Bitcoin breaking 70,000 possibly triggering an altcoin season.

Cryptocurrency investors need to pay attention to the movements of the U.S. Treasury rather than the Federal Reserve. In the current era of fiscal dominance, the demand to fund government operations outweighs the central bank's concerns about inflation. This means that bank credit and nominal GDP growth must remain high, even if it may lead to inflation persistently exceeding target levels.

As the U.S. debt-to-GDP ratio exceeds 100%, the Treasury has gained greater power. The Treasury decides when, how much to issue, and when the debt will be issued. The government now relies on debt-driven growth to maintain the status quo, which will ultimately require the central bank to use the printing press to cover the Treasury's expenses.

U.S. Treasury Secretary Yellen is creating liquidity by increasing the issuance of Treasury bonds. Her goal is to promote nominal economic growth, thereby increasing tax revenue and reducing the U.S. debt-to-GDP ratio. Yellen plans to inject at least $301 billion in liquidity, potentially up to $1.05 trillion, by the end of the year. This will create a strong bull market for various risk assets, including crypto.

Bitcoin has a close relationship with the reverse repurchase program (RRP). When funds leave the Federal Reserve's balance sheet, it increases liquidity and drives up the prices of financial assets with limited supply, such as Bitcoin. Since April of this year, the crypto market has been stagnant or declining, mainly due to reduced issuance of Treasury bills leading to liquidity contraction.

As Yellen plans to net issue $301 billion in treasury bonds by the end of the year, Bitcoin is expected to rebound quickly, with the next target being $100,000. The altcoin season may have to wait until Bitcoin and Ethereum break through $70,000 and $4,000 respectively.

It is expected that cryptocurrencies will start to break away from the downward sideways trend in September. The US elections will be held in early November, and October may be the period with the most abundant liquidity. Investors may consider increasing their investment in crypto assets at the end of summer and taking profits on some speculative positions before the elections.

Once the US debt ceiling issue is resolved in January-February next year, a true bull market will begin. Bitcoin is expected to reach a target price of 1 million dollars. The 2025 China-US crypto bull market is expected to usher in a brilliant market.