Morgan Stanley and iA Private Wealth Break Down Crypto ETP Due Diligence and Bitcoin-Backed Loans

Financial advisors are getting clearer guidance on two of the most practical crypto questions they face: how to evaluate spot bitcoin ETPs and whether clients should borrow against their BTC holdings. Sarah Cummings, ETF Strategist at Morgan Stanley Investment Management, outlines a due diligence framework that goes well beyond headline fees — covering custody arrangements, sponsor profiles, and benchmark methodology as equally consequential variables in ETP selection.

On the lending side, Ryan Tannahill of iA Private Wealth USA flags margin calls as the primary risk advisors must communicate upfront. Centralized bitcoin-backed loans typically require the lender to hold the collateral, and a sharp BTC drawdown can force liquidation at the worst moment — triggering a taxable event on top of the loss. Tannahill's rule of thumb: borrowing makes sense when conviction is high and liquidity…