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

Russell Thompson, Chief Investment Officer at Hilbert Group, has warned of a significant deterioration in global liquidity, 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 some parts of the financial sector, a broader tightening of 20-25% is imminent, posing a substantial challenge for bitcoin. He stated, '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 respond with measures such as reforming the supplementary leverage ratio, reducing the Treasury General Account, and implementing rate cuts under a potential new Fed chair. The U.S. Treasury's ability to inject liquidity into the financial system by drawing down the Treasury General Account could also provide support. Bitcoin's performance over the past six months has been marked by high volatility, shifting from a state of exuberance in 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, falling to around $63,000 by February 2026, a drop of approximately 50% from its peak. 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 now a tentative stabilization phase, driven by macro liquidity, policy expectations, and investor positioning. Advances in crypto regulation, such as anticipated legal clarity on key measures before the summer recess, and a faster-than-expected expansion of the Fed's balance sheet, could also provide support. Thompson argued that 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. He noted that markets remain overly focused on the Federal Reserve as the primary source of liquidity, but the U.S. Treasury has significant capacity to inject funds into both the real economy and financial markets. As a result, Thompson expects short-term pressure on bitcoin but improving conditions over the medium term, with bitcoin likely to be 'significantly higher' by year-end as liquidity dynamics evolve.