According to Russell Thompson, chief investment officer at crypto asset manager Hilbert Group (HILB), global liquidity is anticipated to worsen significantly. He noted that even a swift geopolitical resolution in Iran would likely not sustain risk assets’ rally without policy intervention.
While the rollout of the reserve maturity program (RMP) has stabilized parts of the financial sector, Thompson foresees an impending broader tightening of 20%–25%. This development poses a substantial challenge and could hinder bitcoin’s near-term performance.
“A quick resolution in Iran will not lead to a sustainable rally in risk assets without external assistance,” Thompson remarked in his recent report.
Thompson anticipates U.S. policymakers to take action, suggesting possible measures such as SLR reform, significant drawdowns of the Treasury General Account (TGA) without corresponding Federal Reserve bill issuance, and potential rate cuts under a new Fed chair. The SLR dictates the capital large banks must maintain against their leverage, while the TGA is the U.S. Treasury’s primary cash account at the Federal Reserve.
Drawing down the TGA injects liquidity into the financial system, whereas building it drains liquidity.
Bitcoin has experienced heightened volatility over the past six months, transitioning from late 2025’s exuberance to a more fragile market driven by macroeconomic factors. After reaching an all-time high above $126,000 in October 2025, bitcoin underwent a prolonged decline through year-end into early 2026, dropping to about $63,000 by February—a roughly 50% fall from its peak—amid tighter financial conditions and broader crypto market sell-offs.
Currently trading around $75,600, bitcoin remains significantly below its peak but no longer in steep decline. The past six months encapsulate a full cycle: from peak euphoria to deep correction, settling into a stabilization phase driven by macro liquidity, policy expectations, and investor positioning.
Thompson also sees potential support from advances in crypto regulation, anticipating legal clarity on key measures before the summer recess and an unexpected expansion of the Fed’s balance sheet as disinflationary pressures rise. He suggests higher oil prices could impede growth, while a softening labor market and stress in private credit may contribute to a disinflationary backdrop.
He argues that markets are overly focused on the Federal Reserve for liquidity, overlooking the U.S. Treasury’s capacity to inject funds into both the real economy and financial markets. Given experienced Treasury leadership, Thompson expects a proactive stance.
In summary, while bitcoin faces short-term pressure, medium-term conditions may improve. Thompson predicts bitcoin will be “significantly higher” by year-end as liquidity dynamics evolve, with potential for fresh all-time highs around 2027 if liquidity bottoms in a protracted scenario.