Headline: Hilbert Group CIO warns tightening liquidity could pressure Bitcoin near-term — but expects recovery by year-end Russell Thompson, chief investment officer at crypto manager Hilbert Group, says global liquidity is poised to tighten sharply and that could leave bitcoin vulnerable in the short run — even if geopolitics ease. In a report published last week, Thompson warned that while targeted measures have calmed parts of the financial system, a broader liquidity squeeze of 20%–25% is approaching and will be a material headwind for risk assets, including BTC. Why this matters for Bitcoin - After an October 2025 all-time high above $126,000, bitcoin plunged into a prolonged correction and hit roughly $63,000 by February 2026 — about a 50% drop from the peak. Weak demand, ETF outflows and a risk-off macro backdrop drove the sell-off. - Bitcoin is trading near $75,600 today, well below its peak but currently more stable than during the steep correction. Liquidity dynamics, policy expectations and investor positioning are now the main drivers of price action. What Hilbert expects policymakers to do Thompson does not expect markets to revive sustainably without policy support. He sees several U.S. policy tools likely to be deployed: - Reform of the supplementary leverage ratio (SLR), the banking rule that forces large banks to hold capital against total leverage. - A sizable drawdown of the Treasury General Account (TGA) — the U.S. Treasury’s cash account at the Fed — which would inject liquidity if the Treasury spends down balances. - A potential series of Fed rate cuts under a new Fed chair and a faster-than-expected expansion of the Fed’s balance sheet as disinflation continues. Other macro cross-currents Thompson pointed to factors that could shape the outlook: - Ongoing regulatory clarity: he expects legal clarity on key crypto measures before the summer recess, which could be supportive for markets. - Disinflationary forces: a softening labor market and emerging stress in private credit may push disinflation further, prompting central bank and Treasury support. - Countervailing risks: higher oil prices could weigh on growth even as liquidity trends push the opposite direction. The bottom line Thompson’s view: short-term pressure on bitcoin is likely as liquidity tightens, but conditions should improve over the medium term. He told clients he expects bitcoin to be “significantly higher” by year-end, and he sees liquidity bottoming around 2027 — a timeline that could align with fresh all-time highs if supportive policy and clearer regulation arrive. Read more: U.S. crypto adoption is rebounding, bitcoin still dominates, Deutsche Bank says. Read more AI-generated news on: undefined/news