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

According to Russell Thompson, Chief Investment Officer at Hilbert Group, a significant decline in global liquidity is imminent. Thompson notes that even a swift resolution to the geopolitical situation in Iran is unlikely to lead to a sustained rally in risk assets without support from policymakers. Following the implementation of the reserve maturity program, liquidity conditions have stabilized in certain sectors of the financial industry, but Thompson forecasts a broader tightening of 20-25%, which could substantially hinder bitcoin's performance in the short term. Thompson expressed his doubts, stating, 'Even with a quick resolution in Iran, I do not believe risk assets will experience a sustainable rally without external assistance.' He anticipates that US policymakers will take action, possibly through reforms to the supplementary leverage ratio, a substantial reduction in the Treasury General Account without offsetting Federal Reserve bill issuance, and a series of rate cuts under a potential 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 is the US Treasury's primary cash account at the Federal Reserve. When the Treasury draws down the TGA, it effectively injects liquidity into the financial system, and when it builds up the TGA, liquidity is reduced. Over the past six months, bitcoin has experienced sharp volatility, marking a clear shift 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 entered a prolonged 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 outflows, and a more risk-averse macro backdrop, with BTC 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 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 add to the disinflationary backdrop. Thompson argues that markets are overly focused on the Federal Reserve as the primary source of liquidity, but the US 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. Even in a more protracted scenario, he sees liquidity bottoming around 2027, a timeline that could coincide with fresh all-time highs.