Bitcoin Expected to Face Short-Term Pressure Due to 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 sharp decline. Thompson notes that even a swift resolution to the current geopolitical tensions in Iran is unlikely to lead to a sustained rally in risk assets without support from policy makers. Following the introduction of the reserve maturity program (RMP), liquidity conditions have stabilized in certain areas of the financial sector, but Thompson anticipates a broader tightening of 20-25%, which could pose a significant challenge for bitcoin in the short term. In a report published last week, Thompson stated, 'I do not believe that risk assets will experience a sustainable rally without external assistance, even if the situation in Iran is resolved quickly.' Thompson expects U.S. policymakers to take action, potentially including 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 marked by significant 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. By February, prices had dropped to approximately $63,000, a decline of around 50% from the peak, amid a broader crypto market sell-off and tightening financial conditions. This period was characterized by weaker demand, exchange-traded fund (ETF) outflows, and a more risk-averse macro backdrop, with BTC underperforming equities in some instances. Currently, bitcoin is trading around $75,600, significantly off its peak but no longer in a state of freefall. The last six months have seen 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 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. Thompson argues that 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, but Thompson notes that 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. As a result, Thompson anticipates 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.