Bitcoin Faces 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 significant decline, which could hinder the performance of risk assets and bitcoin in the short term, even if there is a swift resolution to the geopolitical situation in Iran. Thompson notes that while the rollout of the reserve maturity program has stabilized liquidity conditions in certain parts of the financial sector, a broader tightening of 20-25% is imminent, which could pose a substantial challenge for bitcoin. In a report published last week, Thompson expressed his doubts about the ability of risk assets to sustain a rally without external support, stating, 'Even with a quick resolution in Iran, I do not believe risk assets will experience a sustainable rally without external assistance.' Thompson anticipates that U.S. policymakers will take action, potentially including 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, 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's performance has been characterized by 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 experienced a sustained decline through the end of the year and into early 2026, with prices falling to around $63,000 by February, representing a decline of approximately 50% from its peak. This period was marked by weaker demand, exchange-traded fund outflows, and a risk-off macro environment, with bitcoin underperforming equities at times. Currently, bitcoin is trading around $75,600, significantly off its peak but no longer in a state of freefall. The past six months have seen a full cycle, from peak euphoria to a deep correction and now a tentative stabilization phase, with macro liquidity, policy expectations, and investor positioning 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. 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. As a result, Thompson predicts 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, and even in a more protracted scenario, he sees liquidity bottoming around 2027, a timeline that could coincide with fresh all-time highs.