Bitcoin Under Short-Term Pressure 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 on the verge of a significant decline. This deterioration, even if a rapid resolution to the Iran geopolitical situation occurs, is unlikely to support a sustained risk asset rally without external policy support. Thompson notes that while the rollout of the reserve maturity program has stabilized liquidity conditions in certain sectors, a broader 20-25% tightening is looming, posing a substantial drag on bitcoin's near-term performance. In a report published last week, Thompson expressed skepticism about the ability of risk assets to rally without external help, even in the event of a swift resolution to the Iran situation. He anticipates that US policymakers will intervene with measures such as reforming the supplementary leverage ratio, reducing the Treasury General Account, and implementing rate cuts under a potential new Fed chair. The supplementary leverage ratio is a banking regulation requiring large banks to hold a certain amount of capital against their total leverage, while the Treasury General Account serves as the US Treasury's primary cash account at the Federal Reserve. When the Treasury draws down the TGA, it injects liquidity into the financial system, whereas building the TGA drains liquidity. Over the past six months, bitcoin has exhibited sharp volatility, transitioning from late-2025 exuberance to a more fragile market driven by macro factors. 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, falling to around $63,000 by February. This decline of approximately 50% from its peak occurred amidst a broader crypto market sell-off and tightening financial conditions, characterized by weaker demand, exchange-traded fund outflows, and a risk-off macro environment. Currently, bitcoin is trading around $75,600, significantly off its peak but no longer in freefall. The last six months have seen a complete cycle, from peak euphoria to a deep correction and now a tentative stabilization phase, with macro liquidity, policy expectations, and investor positioning driving the market. Advancements in crypto regulation could 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, while the US 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 predicts 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, potentially coinciding with fresh all-time highs.