Market Stability Amid Geopolitical Uncertainty: Bitcoin and Stock Futures as Strategic Hedges

Geopolitical uncertainty has become a defining feature of global markets in 2025-2026, with the U.S. Supreme Court's impending ruling on President Donald Trump's 2025 tariffs poised to reshape trade policy and investor behavior. As the court debates the legality of sweeping tariffs imposed under the International Emergency Economic Powers Act (IEEPA), investors are increasingly turning to alternative hedging tools like Bitcoin and stock futures to navigate the volatility. This article examines how these instruments stack up as strategic hedges, drawing on recent research and market dynamics.

Bitcoin: A Volatile Yet Resilient Alternative

Bitcoin's role as a geopolitical risk hedge remains contentious. While its decentralized nature and limited supply offer theoretical advantages over traditional assets, its price volatility undermines its effectiveness. For instance, in late 2025, gold outperformed Bitcoin amid rising geopolitical risks, with safe-haven demand pushing gold prices higher while Bitcoin weakened due to its greater price fluctuations. Studies confirm this pattern: cryptocurrencies like Bitcoin exhibit mixed responses to geopolitical events, with volatility often amplifying uncertainty rather than mitigating it.

However, Bitcoin's resistance to government control and monetary policy interventions still appeals to some investors. During periods of trade policy uncertainty, Bitcoin's price has shown sensitivity to legal and regulatory shifts. For example, prediction markets currently price a 23-31% chance of the Supreme Court upholding Trump's tariffs, with most traders expecting the tariffs to be ruled illegal. If invalidated, a potential "tariff shock" could trigger a risk-on rally, benefiting Bitcoin as part of broader market optimism. Yet, its derivatives positioning suggests the market is not yet pricing in a large shock premium, highlighting its speculative nature.

Stock Futures: A Mixed Bag in Trade Policy Uncertainty

Stock futures are often viewed as hedging tools during geopolitical uncertainty, but their performance depends on broader economic and policy contexts. In early 2026, North American stock futures fell amid heightened tensions in Venezuela and Iran, illustrating how geopolitical risks can drive caution rather than stability . The Supreme Court's tariff ruling adds another layer of complexity. If the court strikes down the IEEPA tariffs, average tariff rates could drop from 16.1% to 10.4%, potentially boosting equity markets-particularly consumer discretionary stocks-and triggering a short-term rally in the S&P 500. Conversely, if the ruling upholds the tariffs, inflationary pressures and supply chain reconfiguration could persist, increasing demand for hedging strategies.

Stock futures also face headwinds from Federal Reserve policy and inflationary pressures. As central banks recalibrate monetary policy, futures markets reflect a tug-of-war between risk-on and risk-off sentiment. For example, the Trump administration's military and trade actions in the Caribbean and Venezuela have amplified the geopolitical risk premium, complicating hedging strategies . While stock futures can help manage exposure to sudden market shifts, their effectiveness is contingent on navigating these overlapping dynamics.

Strategic Considerations for Investors

The Supreme Court's tariff ruling creates a unique environment for hedging. If the tariffs are invalidated, the resulting disinflationary supply-side shock could validate market expectations, boosting equities and potentially Bitcoin. However, the administration's contingency plans-using alternative legal authorities like Section 232 or 301-mean volatility is likely to persist. This legal uncertainty elevates implied volatility across asset classes, reinforcing the need for hedging tools like stock futures .

For Bitcoin, the key challenge lies in its volatility. While it may benefit from a risk-on environment post-ruling, its role as a hedge remains secondary to traditional assets like gold and the U.S. dollar. Investors should also consider Bitcoin's potential as an alternative hedge in scenarios where government control over monetary policy is perceived as a risk .

Conclusion

Bitcoin and stock futures offer distinct but complementary roles in hedging against geopolitical uncertainty. Stock futures provide a more direct tool for managing equity market exposure, particularly in scenarios where trade policy shifts drive short-term volatility. Bitcoin, while less stable, retains appeal as an alternative hedge in environments of regulatory or monetary instability. However, both instruments must be evaluated within the broader context of traditional safe-haven assets and evolving policy landscapes. As the Supreme Court's tariff ruling looms, investors should prioritize diversified hedging strategies that account for both the potential outcomes and the inherent uncertainties of this pivotal moment.