Delaware Life Revolutionizes Bitcoin Annuity with BlackRock IBIT - U.S. First Insurance Product

Delaware Life has decided to launch the first crypto-asset-linked pension product in the United States. The partnership with BlackRock will begin a new attempt to securely provide exposure to Bitcoin within the framework of Fixed Index Annuity (FIA). This move symbolizes a strategic shift in Group 1001, to which Delaware Life belongs.

Fixed Index Annuity (FIA) Brings New Developments to Delaware Life

Delaware Life announced on Tuesday that it will be adding new indexes to its FIA product lineup in collaboration with BlackRock. This index is called the “BlackRock US Equity Bitcoin Balanced Risk 12% Index” and provides a balanced investment opportunity for US stocks and Bitcoin. Delaware Life became the first U.S. insurer to offer such crypto-related insurance products, marking a turning point in the traditional financial industry.

The company’s efforts open up new avenues for investors to access Bitcoin returns while protecting their principal. This approach will be particularly appealing to near-retirement investors who value risk management.

Balance Principal Protection and Growth with the BlackRock Index and IBIT

The structure of the index is designed using BlackRock’s iShares Bitcoin Trust ETF (IBIT). It adopts a dynamic cash allocation strategy to control volatility while combining US stocks with Bitcoin investments, with a target volatility level set at 12%.

This design protects investors from the volatility of the virtual asset market while allowing them to participate in Bitcoin’s upward gains. “This launch builds on IBIT’s significant success and strong customer demand,” commented Robert Michnick, BlackRock’s Global Head of Digital Assets, highlighting the ability for insurance clients to add exposure to Bitcoin as part of a broader indexed annuity strategy.

Designed for Risk-Conscious Investors

This FIA product is designed for investors who are cautious about traditional Bitcoin investments. The ability to enjoy exposure to both stocks and Bitcoin without risking your principal is a significant advantage for risk-averse retirees.

Investors can participate in Bitcoin’s growth opportunities through insurance products without directly purchasing and managing crypto assets, significantly reducing the complexity and procedural burden. This combination of convenience and safety sets this Delaware Life product apart.

Changing the way traditional financial institutions engage with digital assets

Since its inception in 2024, BlackRock’s Bitcoin ETF “IBIT” has grown to become the largest and most liquid ETF of its kind. Delaware Life’s move reflects the broader changes in financial institutions, while building on the success of IBIT.

The way traditional financial institutions engage with digital assets is rapidly evolving. IBIT is not just an investment vehicle but now serves as a bridge between traditional pension products and the crypto market. This initiative by Delaware Life will be a symbolic example of how the entire financial system is becoming more integrated with the crypto ecosystem.

Looking at the current state of the market, spot crypto trading volume has decreased from $1.7 trillion last year to around $900 billion with the price of Bitcoin hovering around $84,000. Amidst these market conditions, crypto integration in the insurance and pension sectors could create new demand and diversify the investor base.