U.S. insurer Delaware Life announced on the 20th the launch of the first fixed index annuity (FIA) linked to Bitcoin, based on the BlackRock U.S. Equity Bitcoin Balanced Risk 12% Index. The move marks a formal entry of retirement funds into crypto assets.
Product Design: 12% Volatility Target, Principal Safe
The "12%" in the index name refers to its volatility control target. When the market is volatile, the index increases cash allocation to reduce risk; when stable, it boosts asset exposure for returns. The goal is to keep annualized volatility around 12%, roughly the long-term average of U.S. equities. The annuity contract guarantees principal at maturity. The portfolio is roughly 74% tracking the S&P 500, 21-25% indirectly holding Bitcoin through BlackRock's spot ETF (IBIT), and the rest in cash. The index algorithm dynamically raises cash when Bitcoin fluctuates sharply, capping annualized volatility at 12%.
Return Cap: Excess Gains Go to the Institution
If the market rallies, investors only receive a pre-set capital gain cap (Cap Rate), with the excess retained by the institution as hedging and management fees. This structure transforms Bitcoin's volatility into a controlled risk exposure while limiting potential upside for investors in extreme scenarios.
Policy Window: Trump Executive Order Greenlights Retirement Crypto
The product's launch is closely tied to an executive order signed by President Trump on August 7, 2025, allowing 401(k) and other retirement plans to allocate digital assets, reducing regulatory hurdles for insurers. Delaware Life's marketing head called the new product "a thoughtful innovation." With policy green lights and ETF ecosystem maturity, conservative institutions are willing to experiment with Bitcoin in annuities.
Target Audience: Bitcoin Exposure Without Principal Loss
This annuity targets conservative investors who want Bitcoin exposure but cannot tolerate principal loss. As of end-2025, the index had fallen 3.16% over three months due to a Bitcoin correction, showing returns are limited but volatility is much lower than spot markets. As retirement systems absorb crypto assets, some Bitcoin will be locked in low-turnover products, potentially reducing panic selling and stabilizing medium-to-long-term liquidity.
Delaware Life's FIA repositions Bitcoin from a high-volatility, high-barrier asset into a yield source compatible with conservative portfolios. This shows traditional finance, through financial engineering and policy space, is transforming crypto into an acceptable new asset class for pension markets.