Key insights
- Ripple Prime is moving into a financing market traditionally dominated by large banks.
- Leveraged ETF growth gives nonbank brokerages more opportunities to provide swap financing.
- This growth is in addition to Ripple’s payments and cryptocurrency services institutional approach.
Ripple has entered the leveraged exchange traded fund financing market through Ripple Prime, extending its institutional business into a sector long dominated by major Wall Street firms. The move gives the company a new source of financing income as leveraged funds expand across U.S. equity markets.
A new role in leveraged ETF trading
According to a Wall Street Journal report published Oct. 7, Ripple Prime now provides swap financing to leveraged ETF operators. These funds use derivatives to gain amplified exposure to stocks and market indexes without purchasing the full underlying positions.
One client is the Tradr 2X Long SNDK Daily ETF, which targets twice the daily performance of Sandisk shares. The fund pays a financing rate tied to the overnight bank funding rate plus four percentage points.
That structure gives Ripple a direct financing revenue stream from leveraged products. The reported rate works out to about 8% annually at prevailing funding levels, although actual costs can change with market rates.
Leveraged ETFs typically reset their exposure each trading day. Therefore, their longer-term returns can differ sharply from the simple multiple of an underlying asset’s cumulative performance.
Hidden road deal builds the foundation
Ripple’s move into the business follows its $1.25 billion acquisition of Hidden Road. The company completed the transaction in October 2025 and renamed the brokerage operation Ripple Prime.
Hidden Road already provided institutional clients with trading, clearing and financing across several asset classes. The acquisition therefore gave Ripple an established platform for expanding beyond digital assets and payment infrastructure.
The brokerage later launched its Delta One business in August 2026. The service offers total return swaps linked to U.S. stocks, indexes and digital assets.
Meanwhile, Ripple Prime has expanded its institutional reach through additional financing capacity. It brought in 275 million dollars through unsecured notes in August and got another 200 million dollars financing facility from funds managed by Neuberger Berman in May.
The total agreements gave the brokerage access to much as 475 million dollars through different financing structures.
Banks face new competition from nonbanks
The leveraged ETF market has grown a lot as investors look for exposure to individual stocks. Morningstar Direct data shows 593 leveraged ETFs in the U.S. Market holding than 256 billion dollars in assets.
Of those 426 are focused on stocks. Because of this fund managers need counterparties that can handle swaps, financing, collateral and risk management at a scale.
Big banks used to provide most of this infrastructure. However capital and risk requirements have created chances for nonbank companies like Ripple Prime, Jane Street and Clear Street.
Ripple Prime now works with than 300 institutional clients, including hedge funds, proprietary trading firms and liquidity providers. The brokerage also had than 1 billion dollars, in regulatory net capital when it started its Delta One operation.
The expansion also coincides with a broader institutional push. On Oct. 6, Brevan Howard expanded its relationship with Ripple Prime to cover brokerage, clearing and financing across traditional and digital markets.
Three developments stand out from the expansion
- Leveraged ETF financing adds a new fee-based business beyond Ripple’s traditional crypto operations.
- The brokerage can compete for institutional flows that once relied heavily on bank balance sheets.
- Growing leveraged ETF demand could create additional opportunities for alternative swap providers.
Financing push expands wall street ambitions
The latest business gives Ripple exposure to a growing part of institutional markets without requiring it to become a traditional stock trader. Instead, Ripple Prime acts as a financing and derivatives intermediary while ETF managers retain responsibility for their investment strategies.
The company has also incorporated RLUSD into its institutional services, allowing eligible clients to use the stablecoin as collateral. However, Ripple has not disclosed whether the reported leveraged ETF arrangements use XRP, RLUSD or the XRP Ledger.
The difference is important because the new business is part of a financial plan instead of just growing XRP use. It brings the company nearer, to known prime brokerage companies that make money through lending, processing trades and handling financial contracts.
The model also carries risks. Rapidly changing underlying stocks can trigger a rapid decline in value for leveraged funds, and financing counterparties have to deal with market exposure and collateral.
Conclusion
Ripple Prime’s announcement of the financing for leveraged ETFs represents another milestone in the company’s evolution to become a more comprehensive institutional financial services firm. It has been backed by its Hidden Road purchase, new financing and client relationships to quicken the growth.
As leveraged products grow, the business can provide the company with regular earnings from institutional fees. But over the longer term, it is risk controls, capital availability and being competitive with established Wall Street counterparty that will determine its future position.
