Global liquidity is expected to deteriorate sharply, according to Russell Thompson, chief investment officer at crypto asset manager Hilbert Group (HILB), who said even a quick geopolitical resolution in Iran is unlikely to support a recovery in risk assets without political support.
Liquidity conditions have stabilized in parts of the financial sector following the rollout of the Reserve Maturity Program (RMP), Thompson said, but a broader tightening of 20% to 25% is approaching, a significant drag that could leave Bitcoin in difficulty in the short term.
“Even with a rapid resolution in Iran, I do not believe that risk assets will sustainably recover without external assistance,” Thompson said in the report released last week.
Thompson said he expects U.S. policymakers to respond. He discussed likely measures including reform of the supplementary leverage ratio (SLR), a significant reduction in the Treasury General Account (TGA) without offsetting Federal Reserve bond issuance, and a series of rate cuts under a possible new Fed chair.
The SLR is a banking regulation that sets the amount of capital that large banks must hold in relation to their total debt. The TGA is the U.S. Treasury’s primary cash account at the Federal Reserve.
When the Treasury withdraws from TGA (spending money), liquidity is effectively injected into the financial system; when it builds the TGA, the liquidity is exhausted.
Bitcoin’s performance over the past six months has been marked by high volatility, a clear shift from the exuberance of late 2025 to a more fragile, macro-focused market.
After hitting an all-time high above $126,000 in October 2025, bitcoin entered a sustained decline through the end of the year and early 2026. By February, prices had fallen to around $63,000, a decline of around 50% from the peak, amid a broader crypto market selloff and tightening financial conditions. This period was characterized by weaker demand, exchange-traded fund (ETF) outflows, and a more risk-averse macroeconomic backdrop, with BTC underperforming stocks in some periods.
Bitcoin is currently trading around $75,600, which leaves it significantly below its peak but no longer in free fall. In short, the last six months have been marked by a complete cycle: from maximum euphoria to a deep correction, then to a temporary phase of stabilization, with macroeconomic liquidity, political expectations and investor positioning now the dominant factors.
Advances in crypto regulation could also provide support. Thompson said he expects legal clarity on key measures before the summer break and a faster-than-expected expansion of the Fed’s balance sheet as disinflationary pressures build.
According to him, the rise in oil prices could ultimately weigh on growth, while the slowdown in the labor market and emerging tensions on private credit could worsen the disinflationary context.
Markets remain too 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. As Treasury leaders are experienced in deploying such tools, he expects a more proactive approach.
Result: short-term pressure on bitcoin, but improved conditions in the medium term.
Thompson said he expects bitcoin to be “significantly higher” by the end of the year as liquidity dynamics evolve. Even in a longer-term scenario, he estimates that liquidity is likely to bottom out around 2027, a timeline that could coincide with new all-time highs.
Learn more: US Crypto Adoption Rebounds, Bitcoin Still Dominates, Deutsche Bank Says
