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

A sharp decline in global liquidity is anticipated by Russell Thompson, Chief Investment Officer at Hilbert Group, a crypto asset management firm. Thompson believes that even a swift resolution to the geopolitical situation in Iran may not be enough to sustain a rally in risk assets without the support of policy measures. Following the implementation of the reserve maturity program (RMP), liquidity conditions have stabilized in certain sectors of the financial industry, but a broader contraction of 20%–25% is looming, which could pose a significant challenge for bitcoin in the short term. Thompson stated, 'I do not think risk assets will experience a sustained rally without external assistance, even if the situation in Iran is resolved quickly.' He expects U.S. policymakers to take action, potentially through reforms to the supplementary leverage ratio (SLR), a substantial reduction in the Treasury General Account (TGA) without offsetting Federal Reserve bill issuance, and a series of interest rate cuts under a potential new Fed chair. The SLR is a banking regulation that dictates the amount of capital large banks must hold against their total leverage, while the TGA serves as 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 up the TGA drains liquidity. Over the past six months, bitcoin's performance has been characterized by significant volatility, marking a shift from the exuberance of late 2025 to a more fragile, macro-driven market. After reaching an all-time high above $126,000 in October 2025, bitcoin entered a prolonged decline through the end of the year and into early 2026. By February, prices had dropped to around $63,000, a decline of approximately 50% from the peak, amid a broader crypto market sell-off and tightening financial conditions. This period was marked by weaker demand, exchange-traded fund (ETF) outflows, and a more risk-averse macro backdrop, with bitcoin underperforming equities in certain periods. 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, with macro liquidity, policy expectations, and investor positioning driving the market. Advances 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, but 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 predicts short-term pressure on bitcoin but improving conditions over the medium term. He expects bitcoin to be 'significantly higher' by the end of the year as liquidity dynamics evolve. Even in a more protracted scenario, he sees liquidity bottoming around 2027, a timeline that could coincide with fresh all-time highs.