Bitcoin to Face Short-Term Challenges Amid Tightening Liquidity, According to Hilbert Group CIO

According to Russell Thompson, Chief Investment Officer at Hilbert Group, a crypto asset management firm, global liquidity is expected to deteriorate substantially. Thompson believes that even a swift resolution to the geopolitical tensions in Iran may not be enough to sustain a rally in risk assets without support from policymakers. Following the introduction of the reserve maturity program, liquidity conditions have stabilized in certain areas of the financial sector, but a broader tightening of 20-25% is anticipated, which could hinder bitcoin's performance in the near term. Thompson expects US policymakers to intervene with measures such as reforming the supplementary leverage ratio, reducing the Treasury General Account, and implementing rate cuts under a potential new Federal Reserve chair. Bitcoin has experienced high volatility over the past six months, shifting from a state of exuberance to a more fragile, macro-driven market. After reaching an all-time high above $126,000 in October 2025, bitcoin entered a prolonged downturn, falling to around $63,000 by February 2026, a decline of approximately 50% from its peak. Currently, bitcoin is trading around $75,600, significantly off its peak but no longer in a state of free fall. The past six months have seen a full cycle, from peak euphoria to a deep correction, and now a tentative stabilization phase, driven by macro liquidity, policy expectations, and investor positioning. Advances in crypto regulation may also provide support, with Thompson anticipating legal clarity on key measures before the summer recess and a faster-than-expected expansion of the Fed's balance sheet as disinflationary pressures build. Higher oil prices could ultimately weigh on growth, while a softening labor market and emerging stress in private credit may add to the disinflationary backdrop. Thompson argues that markets are overly focused on the Federal Reserve as the primary source of liquidity, but the US Treasury has significant capacity to inject funds into both the real economy and financial markets. As a result, Thompson expects short-term pressure on bitcoin but improving conditions over the medium term, with bitcoin potentially reaching significantly higher levels by the end of the year as liquidity dynamics evolve.