Bitcoin Faces Short-Term Pressure Amid 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 believes that even a swift resolution to the geopolitical situation in Iran is unlikely to sustain a rally in risk assets without support from policy measures. Following the implementation of the reserve maturity program (RMP), liquidity conditions have stabilized in certain parts of the financial sector, but Thompson anticipates a broader tightening of 20-25%, which could significantly hinder bitcoin's performance in the near term. In a recent report, Thompson stated, 'I do not think risk assets will experience a sustained 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 Federal Reserve 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 has exhibited sharp volatility, marking a significant shift from the exuberance seen in 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. By February, prices had fallen to around $63,000, a decline of approximately 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 environment, with bitcoin 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, 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 Federal Reserve's balance sheet as disinflationary pressures build. Higher oil prices, Thompson argues, 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, Thompson notes, but 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 anticipates short-term pressure on bitcoin, but improving conditions over the medium term. He expects bitcoin to be 'significantly higher' by year-end 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.