Bitcoin Faces Short-Term Pressure Amid Tightening Liquidity, According to Hilbert Group CIO

According to Russell Thompson, chief investment officer at Hilbert Group, global liquidity is poised to deteriorate sharply. Thompson notes that even a swift resolution to the geopolitical situation in Iran is unlikely to sustain a rally in risk assets without support from policy makers. Following the implementation of the reserve maturity program (RMP), liquidity conditions have stabilized in certain sectors of the financial industry, Thompson observes. However, he forecasts a broader tightening of 20-25%, which could significantly hinder bitcoin's performance in the near term. Thompson expressed his doubts about the ability of risk assets to sustain a rally without external assistance, stating, 'Even with a rapid resolution in Iran, I do not believe that risk assets will experience a sustained rally without external support.' Thompson anticipates that U.S. policymakers will 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 Fed chair. The SLR is a banking regulation that determines the amount of capital large banks must hold against their total leverage. 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 has the opposite effect. Over the past six months, bitcoin's performance has been marked by significant volatility, shifting 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, a decline of around 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 BTC underperforming equities in some instances. Currently, bitcoin is trading around $75,600, significantly off its peak but no longer in free fall. The last 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 may also provide support. Thompson expects legal clarity on key measures before the summer recess and a faster-than-anticipated expansion of the Fed's balance sheet as disinflationary pressures build. Thompson argues that 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 notes that markets are overly focused on the Federal Reserve as the primary source of liquidity. However, he believes the U.S. Treasury has significant capacity to inject funds into both the real economy and financial markets, and with experienced Treasury leadership, he expects a more proactive approach. The outcome will be 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. Even in a more protracted scenario, he sees liquidity bottoming around 2027, a timeline that could coincide with fresh all-time highs.