Russell Thompson, chief investment officer of crypto asset manager Hilbert Group (HILB), said global liquidity will worsen sharply, saying that without policy support, even a quick resolution to Iran’s geopolitical issues is unlikely to sustain the rebound in risk assets.
Thompson said that liquidity conditions in parts of the financial sector have stabilized following the rollout of the Reserve Maturity Program (RMP), but a broader tightening of 20% to 25% is coming, which could severely weigh on Bitcoin. You’ll be in trouble in the short term.
“Even if the Iran issue is resolved soon, I don’t think risk assets will continue to rebound without outside help,” Thompson said in a note released last week.
Thompson said he expected U.S. policymakers to respond. He pointed to possible measures including Supplemental Leverage Ratio (SLR) reform, a significant reduction in the Treasury General Account (TGA) without offsetting Fed note issuance, and a series of rate cuts under a potential new Fed chair.
The SLR is a banking regulation that dictates how much capital large banks must hold against their total leverage ratio. The TGA is the U.S. Treasury’s primary cash account with the Federal Reserve.
When the Treasury withdraws the TGA (spends funds from it), liquidity is effectively injected into the financial system; when it establishes the TGA, liquidity is drained.
Bitcoin’s performance over the past six months has been marked by wild swings, with a clear shift from late-2025 exuberance to a more fragile macro-driven market.
After hitting an all-time high of over $126,000 in October 2025, Bitcoin continued to decline from the end of the year to early 2026. By February, Bitcoin prices had fallen to about $63,000, down about 50% from their peak, amid a broader sell-off in the cryptocurrency market and tightening financial conditions. This period has been characterized by weak demand, exchange-traded fund (ETF) outflows, and a more risk-off macro backdrop, with Bitcoin underperforming stocks in some respects.
Bitcoin is currently trading around $75,600, which is well below its peak but no longer in free fall. In short, the past six months have been a complete cycle: from the peak of mania, to a deep correction, to a temporary stabilization phase, with macro liquidity, policy expectations and investor positioning now being the main drivers.
Advances in cryptocurrency regulation could also provide support. Thompson said he expected legal clarity on key measures before the summer recess and that the Fed’s balance sheet would expand faster than expected as deflationary pressures build.
He believes rising oil prices could ultimately put pressure on economic growth, while labor market weakness and the emergence of private credit stress could add to a deflationary backdrop.
Thompson said the market is still overly focused on the Fed as the main source of liquidity, but the U.S. Treasury has strong capabilities to inject funds into the real economy and financial markets. He expects a more proactive approach because Treasury leadership is experienced in deploying such tools.
The result: Bitcoin is under pressure in the short term, but conditions are improving in the medium term.
Thompson said he expects Bitcoin to move “significantly higher” by the end of the year as liquidity dynamics develop. Even in a more durable scenario, he believes liquidity will bottom out around 2027, a timeline that could coincide with new all-time highs.
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