Bitcoin Under Short-Term Pressure Due to 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 deteriorate substantially, making it unlikely for risk assets to sustain a rally without policy support, even if there is a quick resolution to the geopolitical situation in Iran. 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 significantly hinder bitcoin's progress in the short term. Thompson expressed his doubts about the ability of risk assets to experience a sustained rally without external assistance, even if the Iran situation is resolved quickly. He anticipates that US policymakers will take action, potentially through reforms to the supplementary leverage ratio, a substantial reduction in the Treasury General Account without offsetting Federal Reserve bill issuance, and a series of 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 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 the TGA drains liquidity. Over the past six months, bitcoin has experienced sharp 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, with prices falling to around $63,000 by February, a decline of approximately 50% from the peak, amidst 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-off macro backdrop, with BTC underperforming equities in some instances. 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 finally 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 could ultimately weigh on growth, while a softening labor market and emerging stress in private credit may add to the disinflationary backdrop. Markets remain overly focused on the Federal Reserve as the primary source of liquidity, Thompson noted, 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, bitcoin may face short-term pressure but is likely to experience improving conditions over the medium term. Thompson expects bitcoin to be 'significantly higher' by the end of the year 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.