The crypto market is expected to warm up in September, and Bitcoin breaking through $70,000 will drive the alts season.

Water is a key factor in the quality of coffee. Similarly, liquidity is crucial for accumulating Bitcoin. Identifying the sources and flows of fiat liquidity is key to successful investing.

Currently, the focus should not be on the Federal Reserve, but rather on the U.S. Treasury. Under the guidance of the Treasury, funding for national needs has surpassed inflation considerations. This means that bank credit and nominal GDP growth must remain high, even if it leads to inflation staying above target.

Yellen's goal is to create nominal economic growth, increase tax revenue, and reduce the U.S. debt-to-GDP ratio. She needs to transfer funds from the Federal Reserve's balance sheet to the real economy. Short-term Treasury bills are a perfect tool to replace the funds held by banks and money market funds at the Federal Reserve.

As funds flow out of the reverse repurchase program (RRP), the prices of limited assets such as Bitcoin rise. The Treasury Borrowing Advisory Committee (TBAC) report indicates that RRP funds are almost transferred one-to-one to Treasury bills during 2023-24.

The Treasury plans to issue $271 billion in Treasury bonds by the end of the year, along with a $30 billion buyback plan, injecting a total of $301 billion in liquidity. If the $750 billion general account (TGA) is reduced to zero, up to $1.05 trillion can be injected. This will drive a bull market in risk assets ahead of the election.

In the future, banks may use reserves to purchase high-yield treasury bonds, releasing $3.3 trillion in liquidity. Banks are now reluctant to buy long-term government bonds and prefer lower-risk short-term treasury bonds.

The fluctuation of the yen exchange rate has triggered turbulence in the global market, but after the Bank of Japan abandoned consideration of interest rate hikes, the focus has returned to U.S. fiscal policy.

Since April, the crypto market has been in a sideways decline, mainly due to tax-related reductions in borrowing by the Treasury. However, the increase in treasury bond issuances in the coming months will drive Bitcoin up, targeting $100,000.

The altcoin season requires Bitcoin to break through $70,000 and Ethereum to break through $4,000. It is expected that the crypto market will begin to rebound in September, and the best liquidity opportunity will arrive before the end of the year.

The election results are uncertain, and it is recommended to re-enter the market after the debt ceiling is raised. Once the U.S. debt ceiling issue is resolved, a real bull market will begin, and Bitcoin at $100,000 remains the basic expectation. The 2025 China-U.S. crypto bull market is expected to be brilliant.