Bitcoin Faces Short-Term Pressure as Global Liquidity Dwindles, 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 deterioration, undermining the potential for a sustained rally in risk assets, including bitcoin, without policy support. Despite the recent stabilization of liquidity conditions in certain segments of the financial sector following the introduction of the reserve maturity program, Thompson forecasts a broader tightening of 20-25%, which could significantly impede bitcoin's progress in the near term. Thompson expressed skepticism regarding the ability of risk assets to experience a prolonged rally in the absence of external assistance, even if a swift resolution to the geopolitical situation in Iran is achieved. He anticipates that U.S. policymakers will implement measures to alleviate the situation, including potential reforms to the supplementary leverage ratio, a substantial reduction in the Treasury General Account, and a series of rate cuts under the leadership of a new Fed 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 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 the TGA has the opposite effect. Over the past six months, bitcoin's performance has been characterized by heightened volatility, marking a pronounced shift from the exuberance of late 2025 to a more fragile, macro-driven market. Following its 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 plummeting to approximately $63,000 by February, representing a decline of roughly 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 during certain periods. Currently, bitcoin is trading around $75,600, significantly off its peak but no longer in freefall. The past six months have witnessed a complete cycle, ranging from peak euphoria to a deep correction and, ultimately, a tentative stabilization phase, with macro liquidity, policy expectations, and investor positioning now serving as the dominant drivers. Advances in crypto regulation may also provide support, with Thompson anticipating legal clarity on key measures prior to the summer recess and a faster-than-expected expansion of the Fed's balance sheet as disinflationary pressures build. Higher oil prices could weigh on growth, while a softening labor market and emerging stress in private credit may contribute to the disinflationary backdrop. Thompson argues that markets remain overly focused on the Federal Reserve as the primary source of liquidity, whereas the U.S. Treasury possesses significant capacity to inject funds into both the real economy and financial markets. With the Treasury leadership experienced in deploying such tools, he expects a more proactive approach. 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 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.