Hilbert Group CIO Russell Thompson says global liquidity is deteriorating fast, and the contraction could reach 20% to 25%. His view is blunt: even if geopolitical tensions involving Iran fade quickly, risk assets are unlikely to sustain any durable rally without meaningful support from central banks. In that setup, Bitcoin faces short-term downside pressure.
He pointed to the U.S. Reserve Maturity Program, which had helped stabilize short-term funding conditions in parts of the financial system. That relief, in his view, does not change the broader picture. Thompson wrote that without outside support, risk assets are unlikely to keep advancing for long.
Policy responses could shape the next liquidity turn
Thompson expects U.S. policymakers to step in if liquidity conditions worsen. He outlined several possible responses: easing the banking sector’s Supplementary Leverage Ratio (SLR) rules so banks can expand participation in the $29 trillion Treasury market; drawing down the Treasury General Account, or TGA, to inject cash through government spending and debt repayment; and launching a rate-cutting cycle under a new Federal Reserve chair.
These are scenarios rather than confirmed actions. Still, his argument is clear: macro liquidity remains the key external driver for crypto, and policy decisions could set the tone for Bitcoin’s next major move.
Bitcoin has moved from euphoria to correction and into consolidation
Looking back over the past six months, Thompson described Bitcoin’s price action as a sharp round trip. After breaking above its record of $126,000 in October 2025, Bitcoin fell to about $63,000 by February, a drawdown of 50%. During that period, spot ETF flows stayed negative, while defensive positioning tied to the macro backdrop weighed on crypto. At times, Bitcoin lagged U.S. equities.
Bitcoin is now trading around $75,600. The price remains well below its all-time high, but the earlier freefall has stopped. Thompson framed the period as a “mini-cycle”: intense bullish sentiment, a deep correction, then early stabilization. At this stage, liquidity conditions, policy expectations, and investor positioning are the main forces shaping the market.
Regulatory clarity and disinflation may matter later
Thompson also sees regulation as a possible support factor. He said the U.S. Congress could deliver legal clarity on key crypto measures before the summer recess. At the same time, growing disinflation pressure could push the Federal Reserve to expand its balance sheet faster than many expect.
He added that elevated oil prices may drag on growth, while a weakening labor market and signs of stress in private credit could deepen disinflationary pressure. He also argued that markets focus too heavily on the Fed and not enough on the U.S. Treasury, which has its own tools to inject funds into the real economy and financial markets.
His timeline points to late-year upside and a 2027 overlap
Even with a cautious near-term view, Thompson did not turn negative on Bitcoin’s medium-term outlook. He said Bitcoin could still rise significantly before the end of this year as liquidity dynamics shift. If the recovery takes longer, he expects global liquidity to bottom around 2027, a window he believes could coincide with Bitcoin setting fresh highs.
The thrust of his thesis is not tied to a single headline. It rests on how liquidity evolves, whether policymakers intervene, and when those changes begin to flow through to the pricing of risk assets.