Global liquidity will 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 sustain a rally in risk assets without political support.
Liquidity conditions have stabilized in parts of the financial sector following the launch of the reserve maturity program (RMP), Thompson said, but a broader 20% to 25% tightening is approaching, a significant drag that could leave bitcoin fighting in the short term.
“Even with a quick resolution in Iran, I don’t think risk assets will recover for a sustainable time without outside help,” Thompson said in the report released last week.
Thompson said he hopes U.S. authorities will respond. He noted possible measures including reform of the supplementary leverage ratio (SLR), a significant reduction of the Treasury General Account (TGA) without offsetting the issuance of Federal Reserve bills, and a series of rate cuts under a possible new Federal Reserve chair.
The SLR is a banking regulation that establishes how much capital large banks must maintain compared to their total leverage. The TGA is the US Treasury’s main cash account at the Federal Reserve.
When the Treasury withdraws the TGA (spends money from it), liquidity is effectively injected into the financial system; when you build the TGA, liquidity dries up.
Bitcoin’s performance over the past six months has been marked by strong volatility, a clear shift from the exuberance of late 2025 to a more fragile macro-driven market.
After reaching 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 drop of around 50% from the peak, amid a broader cryptocurrency market sell-off and tighter financial conditions. This period was characterized by weaker demand, outflows from exchange-traded funds (ETFs), and a more risk-averse macroeconomic environment, with BTC underperforming stocks in some stretches.
Bitcoin is currently trading around $75,600, leaving it significantly off its peak but no longer in free fall. In summary, the last six months have witnessed a complete cycle: from a peak of euphoria to a deep correction and then to a tentative stabilization phase, in which macroeconomic liquidity, political expectations and investor positioning are now the dominant drivers.
Advances in cryptocurrency 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 Federal Reserve’s balance sheet as disinflationary pressures mount.
He argued that higher oil prices could ultimately weigh on growth, while a weakening labor market and emerging strain on private credit could add to the disinflationary backdrop.
Markets remain too focused on the Federal Reserve as the main source of liquidity, Thompson said, but the U.S. Treasury has significant ability to inject funds into both the real economy and financial markets. Given that Treasury leadership has experience implementing such tools, it expects a more proactive approach.
The result: short-term pressure on bitcoin, but better 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 scenario, he expects liquidity to bottom out around 2027, a timeline that could coincide with new all-time highs.
Read more: US cryptocurrency adoption recovering, bitcoin still dominates, Deutsche Bank says
