Liquidity Crunch Risk: Hilbert Warns BTC Could Face Short-Term Pressure
Digital asset manager Hilbert Group CIO Russell Thompson warns that global liquidity could worsen by 20%–25%, even if an Iran geopolitical flare-up cools. He argues that risk-asset rallies may struggle to sustain without “external support” from central banks, and that a broad liquidity tightening wave could weigh on Bitcoin (BTC) in the near term.
Thompson points to potential U.S. policy “stabilization” tools, including easing banks’ SLR rule to expand exposure to the Treasury market, drawing down the Treasury General Account (TGA) to inject liquidity, and a possible Fed-led rate-cut cycle under a new chair. He notes the Reserve Maturity Program may help stabilize some short-term bank funding, but the overall liquidity outlook still looks tight.
For context, BTC topped near $126k in Oct 2025, fell about 50% to ~$63k by Feb, and is now around $75.6k as it shifts from decline toward consolidation. Catalysts he watches include potential crypto regulatory legal clarity before the U.S. Congress recess this summer and the Fed balance sheet expanding faster as disinflation pressures build.
Net for traders: BTC may face near-term headwinds if liquidity tightens, but the base case remains constructive—“significant upside” by year-end, with a liquidity trough potentially around 2027 that could align with another BTC high.
Bearish
The latest update reinforces that a 20%–25% liquidity tightening cycle could still dominate the macro backdrop even if the Iran situation stabilizes. For BTC, this raises near-term downside risk because liquidity is described as the primary driver of direction, and potential stabilization actions (SLR easing, TGA drawdown, rate cuts) are framed as mitigations rather than an immediate full offset. While BTC has already fallen ~50% from its Oct 2025 peak and is stabilizing near ~$75.6k, traders may stay cautious until liquidity indicators and Fed/Treasury policy headlines confirm a less restrictive regime. The medium-term upside case (regulatory clarity, faster Fed balance-sheet expansion, possible liquidity trough around 2027) supports recovery later, but the probability-weighted impact on BTC price itself is still tilted bearish in the short run.