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 poised to experience a sharp decline. Thompson notes that even a swift resolution to the geopolitical tensions in Iran may not be sufficient to sustain a rally in risk assets without supportive policy measures. Following the introduction of the reserve maturity program, liquidity conditions have stabilized in certain segments of the financial sector. However, Thompson forecasts a broader tightening of liquidity by 20-25%, which could exert significant downward pressure on bitcoin in the near term. Thompson expressed his doubts regarding the sustainability of a risk asset rally without external support, stating, 'Even with a rapid resolution in Iran, I do not believe risk assets will experience a sustained rally without external assistance.' He anticipates that U.S. policymakers will implement measures to address the issue, including potential reforms to the supplementary leverage ratio, a substantial reduction in the Treasury General Account, and a series of interest rate cuts under a new Federal Reserve chair. The supplementary leverage ratio is a banking regulation that dictates the amount of capital large banks must hold against their total leverage. The Treasury General Account 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 has the opposite effect. 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 experienced a sustained decline through the end of the year and into early 2026. By February, prices had dropped to approximately $63,000, representing a decline of around 50% from the peak. This period was marked by weaker demand, outflows from exchange-traded funds, and a more risk-averse macroeconomic backdrop, with bitcoin underperforming equities in certain periods. Currently, bitcoin is trading around $75,600, significantly off its peak but no longer in a state of free fall. The past 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 may also provide support for bitcoin. Thompson expects clarity on key regulatory measures before the summer recess and a faster-than-anticipated 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. Thompson argues that markets are overly focused on the Federal Reserve as the primary source of liquidity, while 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 to addressing liquidity concerns. 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 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 for bitcoin.