Bitcoin faces near-term pressure as liquidity tightens, Hilbert Group CIO says
Russell Thompson warned of a sharp tightening in global liquidity that could weigh on risk assets and bitcoin in the near term, before expected U.S. policy action provides relief.
Bitcoin faces near-term pressure as liquidity tightens, Hilbert Group CIO says
Russell Thompson warned of a sharp tightening in global liquidity that could weigh on risk assets and bitcoin in the near term, before expected U.S. policy action provides relief.
U.S. Federal Reserve headquarters in Washington. (Jesse Hamilton/CoinDesk)
What to know:
Hilbert Group CIO Russell Thompson said he expects global liquidity to tighten by as much as 25%, creating near-term headwinds for bitcoin.
He said he sees the U.S. Treasury and Federal Reserve stepping in with tools including supplementary leverage ratio reform, Treasury General Account drawdown and interest rate cuts.
Thompson maintained a bullish medium-term outlook, with bitcoin likely higher by year-end and potential new highs by 2027.
“Even with a resolution quickly in Iran, I do not believe that risk assets will rally for any sustainable time without outside help,” Thompson said in the report published last week.
Thompson said he expects U.S. policymakers to respond. He pointed to likely measures including reform of the supplementary leverage ratio (SLR), a sizable drawdown of the Treasury General Account (TGA) without offsetting Federal Reserve bill issuance, and a series of rate cuts under a potential new Fed chair.
The SLR is a banking regulation that sets how much capital large banks must hold against their total leverage. The TGA is the U.S. Treasury’s main cash account at the Federal Reserve.
When the Treasury draws down the TGA (spends money from it), liquidity is effectively injected into the financial system; when it builds the TGA, liquidity is drained.
Bitcoin’s performance over the past six months has been marked by sharp volatility, a clear shift from late-2025 exuberance to a more fragile, macro-driven market.
After hitting an all-time high above $126,000 in October 2025, bitcoin entered a sustained drawdown through the end of the year and into early 2026. By February, prices had fallen to roughly $63,000, a decline of about 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 (ETF) outflows and a more risk-off macro backdrop, with BTC underperforming equities in some stretches.
Bitcoin is currently trading around $75,600, leaving it significantly off its peak but no longer in freefall. The last six months, in short, have seen a full cycle: from peak euphoria, to a deep correction, to a tentative stabilization phase, with macro liquidity, policy expectations and investor positioning now the dominant drivers.
Advances in crypto regulation could also provide support. Thompson said he anticipates 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, he argued, could ultimately weigh on growth, while a softening labor market and emerging stress in private credit may add to the disinflationary backdrop.
Markets remain overly focused on the Federal Reserve as the primary source of liquidity, Thompson said, but the U.S. Treasury has significant capacity to inject funds into both the real economy and financial markets. With Treasury leadership experienced in deploying such tools, he expects a more proactive approach.
The result: short-term pressure on bitcoin, but improving conditions over the medium term.
Thompson said he expects bitcoin to be “significantly higher” by year-end 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.
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