Bitcoin May Face Short-Term Pressure Due to Tightening Liquidity, According to Hilbert Group CIO

According to Russell Thompson, Chief Investment Officer at Hilbert Group, global liquidity is expected to deteriorate sharply, which could lead to a decline in risk assets and bitcoin, even if there is a quick resolution to the geopolitical situation in Iran. Thompson stated that without policy support, risk assets are unlikely to experience a sustained rally. He expects US policymakers to take action, including reforming the supplementary leverage ratio, reducing the Treasury General Account, and implementing rate cuts under a potential new Fed chair. The performance of bitcoin over the past six months has been marked by high volatility, shifting from a state of exuberance to a more fragile, macro-driven market. After reaching an all-time high above $126,000 in October 2025, bitcoin experienced a sustained decline, falling to around $63,000 by February 2026. Currently, bitcoin is trading around $75,600, which is significantly lower than its peak but no longer in a state of free fall. The last six months have seen a complete cycle, from peak euphoria to a deep correction, and finally, to a tentative stabilization phase, driven by macro liquidity, policy expectations, and investor positioning. 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. He believes that 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. Thompson noted that markets are overly focused on the Federal Reserve as the primary source of liquidity, but the US 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 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.