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

According to Russell Thompson, Chief Investment Officer at Hilbert Group, a significant deterioration in global liquidity is imminent, which could hinder the growth of risk assets, including bitcoin, even if the current geopolitical tensions in Iran are resolved quickly. Thompson notes 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 expected, posing a substantial challenge for bitcoin in the short term. Despite this, Thompson anticipates that U.S. policymakers will intervene with measures such as reforming the supplementary leverage ratio, reducing the Treasury General Account, and implementing rate cuts under a potential new Fed chair. 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 a state of 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 are also expected to 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 believes that markets are 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 potentially reaching significantly higher levels by the end of the year as liquidity dynamics evolve.