Bitcoin Under Short-Term Pressure as Global Liquidity Tightens, According to Hilbert Group CIO

According to Russell Thompson, Chief Investment Officer at Hilbert Group, a significant deterioration in global liquidity is imminent, which could undermine the recent rally in risk assets, including bitcoin, even if the current geopolitical tensions in Iran are resolved quickly. Thompson notes that while the rollout of the reserve maturity program has stabilized liquidity conditions in certain areas of the financial sector, a broader tightening of 20-25% is on the horizon, posing a substantial challenge for bitcoin in the near term. In his recent report, Thompson expressed skepticism that risk assets can sustain a rally without external support, stating, 'Even with a quick resolution in Iran, I do not believe that risk assets will experience a sustained rally without outside assistance.' Thompson anticipates that U.S. policymakers will intervene with measures such as reforming the supplementary leverage ratio, reducing the Treasury General Account, and implementing 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 up the TGA drains liquidity. Over the past six months, bitcoin has experienced sharp volatility, marking a significant shift from the exuberance of late 2025 to a more fragile, macro-driven market. Following its all-time high above $126,000 in October 2025, bitcoin entered a prolonged decline, reaching approximately $63,000 by February 2026, a drop of around 50% from its peak, amid a broader crypto market downturn and tightening financial conditions. This period was characterized by weaker demand, exchange-traded fund outflows, and a more risk-averse macro environment, with BTC 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 complete cycle, from peak euphoria to a deep correction and finally to a tentative stabilization phase, with macro liquidity, policy expectations, and investor positioning now 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, Thompson argues, 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 notes, but the U.S. Treasury has significant capacity to inject funds into both the real economy and financial markets. With Treasury leadership experienced in deploying such tools, he expects a more proactive approach, resulting in short-term pressure on bitcoin but improving conditions over the medium term. Thompson 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.