Bitcoin Faces Short-Term Pressure Amid Tightening Liquidity, According to Hilbert Group CIO

According to Russell Thompson, Chief Investment Officer at crypto asset manager Hilbert Group, global liquidity is poised to sharply deteriorate. Thompson notes that even a swift resolution to the geopolitical situation in Iran is unlikely to sustain a rally in risk assets without support from policymakers. Following the introduction of the reserve maturity program, liquidity conditions have stabilized in some areas of the financial sector, but Thompson anticipates a broader tightening of 20-25%, which could significantly weigh on bitcoin in the short term. In a report published last week, Thompson stated, 'Even with a quick resolution in Iran, I do not believe risk assets will experience a sustainable rally without external support.' Thompson expects U.S. policymakers to respond with measures such as reforming the supplementary leverage ratio, a substantial drawdown of the Treasury General Account without offsetting Federal Reserve bill issuance, and a series of rate cuts under a potential new Fed chair. The supplementary leverage ratio is a banking regulation that dictates the amount of capital large banks must hold against their total leverage, while the Treasury General Account is the U.S. Treasury's primary cash account at the Federal Reserve. When the Treasury draws down the TGA, it effectively injects liquidity into the financial system, whereas building the TGA drains liquidity. Over the past six months, bitcoin's performance has been marked by sharp volatility, shifting from late-2025 exuberance to a more fragile, macro-driven market. After reaching an all-time high above $126,000 in October 2025, bitcoin experienced a sustained decline through the end of the year and into early 2026, with prices falling to around $63,000 by February, a decline of approximately 50% from the peak. This period was characterized by weaker demand, exchange-traded fund outflows, and a more risk-averse macro backdrop, with BTC underperforming equities at times. Currently, bitcoin is trading around $75,600, significantly off its peak but no longer in freefall. The last 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 could 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 remain overly focused on the Federal Reserve as the primary source of liquidity, while the U.S. Treasury has significant capacity to inject funds into both the real economy and financial markets. With experienced Treasury leadership, he expects a more proactive approach. As a result, Thompson forecasts short-term pressure on bitcoin but improving conditions over the medium term. He expects bitcoin to be 'significantly higher' by year-end as liquidity dynamics evolve, and even in a more protracted scenario, he sees liquidity bottoming around 2027, a timeline that could coincide with fresh all-time highs.