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 experience a significant downturn, which could hinder the performance of risk assets, including bitcoin, in the near future, even if the current geopolitical tensions in Iran are resolved quickly. Following the introduction of the reserve maturity program, liquidity conditions have stabilized in certain areas of the financial sector, Thompson noted, but a broader tightening of 20-25% is imminent, which could exert substantial downward pressure on bitcoin. Thompson expressed his skepticism regarding the ability of risk assets to sustain a rally without external support, stating, 'Even with a quick resolution in Iran, I do not believe risk assets will experience a sustained rally without outside assistance.' He anticipates that US policymakers will take action, potentially implementing reforms such as adjustments to the supplementary leverage ratio, a substantial reduction in the Treasury General Account without offsetting Federal Reserve bill issuance, and a series of interest rate cuts under a 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 serves as the US 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 marked by pronounced volatility, shifting 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 experienced a sustained decline through the end of the year and into early 2026, with prices dropping to approximately $63,000 by February, a decline of around 50% from its peak, amid a broader crypto market sell-off and tightening financial conditions. This period was characterized by weaker demand, exchange-traded fund outflows, and a more risk-averse macro backdrop, with BTC underperforming equities in certain stretches. Currently, bitcoin is trading around $75,600, significantly off its peak but no longer in freefall. The last six months have witnessed a full cycle, from peak euphoria to a deep correction, and finally, to a tentative stabilization phase, with macro liquidity, policy expectations, and investor positioning emerging as the dominant drivers. Advances in crypto regulation could also provide support, as Thompson anticipates 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 contribute to the disinflationary backdrop. Markets remain overly focused on the Federal Reserve as the primary source of liquidity, Thompson stated, but the US Treasury has significant capacity to inject funds into both the real economy and financial markets, and with Treasury leadership experienced in deploying such tools, 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.