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

According to Russell Thompson, Chief Investment Officer at Hilbert Group, a sharp deterioration in global liquidity is imminent, which could hinder the performance of risk assets and bitcoin in the short term, even if the current geopolitical tensions in Iran are resolved quickly. Thompson noted 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 looming, which could pose a significant challenge for bitcoin. In a report published last week, Thompson expressed his doubts that risk assets can sustain a rally without external support, stating, 'Even with a quick resolution in Iran, I do not believe that risk assets will rally for any sustainable time without outside help.' Thompson anticipates that U.S. policymakers will take action to address the issue, potentially through reforms to the supplementary leverage ratio, a substantial reduction in the Treasury General Account, and a series of 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 has experienced significant volatility, marking a 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, falling to around $63,000 by February 2026, a drop of approximately 50% from its peak. This decline was characterized by weaker demand, exchange-traded fund outflows, and a more risk-averse macro environment, with bitcoin underperforming equities in certain periods. Currently, bitcoin is trading around $75,600, significantly off its peak but no longer in a state of free fall. The past six months have seen a complete 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 contribute to the disinflationary backdrop. Thompson believes that markets are overly focused on the Federal Reserve as the primary source of liquidity, but notes that 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 forecasts 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 prolonged scenario, he sees liquidity bottoming around 2027, a timeline that could coincide with fresh all-time highs.