What to Know

  • Ripple Prime is financing leveraged stock exchange-traded funds, moving into a market traditionally led by major banks and securities firms.
  • The expansion follows Ripple’s $1.25 billion acquisition of Hidden Road, a multi-asset prime brokerage firm, in October 2025.
  • Ripple Prime is providing total return swaps that allow funds to gain amplified exposure to stocks and market indexes without directly buying all of the underlying shares.
  • The Tradr 2X Long SNDK Daily ETF, which targets twice the daily move of Sandisk, pays Ripple the overnight bank funding rate plus four percentage points on swap exposure.
  • That financing cost is roughly 8% annualized at prevailing rates and is separate from the ETF’s management fee.
  • The U.S. market includes 593 leveraged ETFs with more than $256 billion in assets, including 426 funds tied to individual stocks, based on Morningstar Direct data.
  • Ripple launched its Delta One business in August, offering total return swaps tied to U.S. stocks, market indexes and digital assets.
  • Ripple said the operation had more than $1 billion in regulatory net capital and had completed a $275 million senior debt offering to support growth.
  • Ripple Prime has also expanded an agreement with hedge fund manager Brevan Howard to provide brokerage, clearing and financing services across multiple asset classes.
  • Ripple has not disclosed how much revenue leveraged ETF financing generates or how much of the activity uses XRP or the XRP Ledger.

Ripple Moves Deeper Into Institutional Market Infrastructure

Ripple is widening its institutional footprint through Ripple Prime, a prime brokerage division now active in financing leveraged stock exchange-traded funds. The business places the crypto company inside a corner of Wall Street where funds pay financing providers to help amplify daily moves in stocks and indexes. For Ripple, the expansion is not centered on consumer crypto trading or token payments, but on the plumbing behind institutional markets, where clearing, financing, brokerage and risk management can generate recurring fee income.

The move became possible after Ripple completed its $1.25 billion acquisition of Hidden Road in October 2025. Hidden Road brought Ripple an established multi-asset prime brokerage operation that clears trades, finances investment positions and handles transactions across stocks, bonds, currencies and digital assets. That platform gives Ripple a broader route into institutional finance at a time when market participants are increasingly blending traditional asset classes with digital asset infrastructure.

Ripple Prime is now supplying financing to funds that allow investors to multiply the daily performance of individual stocks and market indexes. Leveraged ETFs have become a popular trading vehicle for investors seeking amplified short-term exposure, particularly around volatile technology names and index products. The business is fee-generating for financing providers, but it also requires strict risk controls because losses can develop quickly when underlying assets move sharply.

How Total Return Swaps Power Leveraged ETFs

At the center of Ripple Prime’s new activity is the total return swap, a financial contract widely used by banks, brokers and sophisticated funds. Instead of a leveraged ETF buying enough shares to create all of its promised exposure directly, the fund can enter into a swap with a financing provider. The provider delivers the economic return of the referenced asset, while the fund pays a financing charge and meets collateral requirements.

For example, a fund promising twice the daily return of Nvidia can use a total return swap rather than buying twice its assets in Nvidia shares. The broker or financing firm that provides the exposure will usually hedge its own position by buying stock, using derivatives, or making other offsetting trades. In exchange, the financing provider collects fees from the fund for delivering that exposure.

This structure is common in the leveraged ETF market because it can help funds manage daily exposure targets more efficiently. Leveraged ETFs typically reset their exposure each day, meaning their portfolios must be adjusted frequently to maintain the intended multiple of daily performance. Total return swaps allow the exposure to be managed contractually, though the financing provider must still manage market, liquidity and counterparty risks.

Ripple Prime’s role in this business shows how a crypto-linked financial firm can participate in traditional market financing without the activity necessarily being driven by token trading. The contracts are tied to stocks, indexes and digital assets, but the fee stream comes from institutional financing arrangements rather than retail crypto speculation.

Sandisk ETF Financing Highlights the Fee Opportunity

One disclosed example of Ripple Prime’s financing role involves the Tradr 2X Long SNDK Daily ETF, which seeks twice the daily movement of memory-chip maker Sandisk. The fund pays Ripple the overnight bank funding rate plus four percentage points on the swap exposure. At prevailing rates, that puts the annualized financing cost at roughly 8%, separate from the ETF’s management fee.

That pricing illustrates why the business is attractive to firms with the capital, systems and risk tolerance to participate. Leveraged ETF financing can produce recurring income tied to swap exposure, particularly when demand for amplified single-stock products is strong. Funds need counterparties willing to provide the exposure, manage hedges and stand behind the contracts. In return, financing providers can earn a spread over benchmark funding costs.

The opportunity has grown as the leveraged ETF market has expanded. The U.S. market now includes 593 leveraged ETFs holding more than $256 billion, including 426 funds tracking individual stocks, according to Morningstar Direct data. Single-stock leveraged ETFs have created new financing needs because they concentrate exposure in individual companies rather than broad baskets, potentially increasing both demand and risk for swap providers.

For Ripple Prime, this market offers a way to earn fees from stock-market activity while building institutional relationships beyond digital assets. It also positions the firm alongside established players and nonbank competitors in an area where scale, capital and execution matter. However, the economics are only attractive if risk is controlled effectively, especially during fast-moving sessions in heavily traded individual stocks.

Why Nonbank Firms Are Gaining Ground

Major banks and securities firms have traditionally supplied much of the financing used by leveraged ETFs and similar products. Banks have large balance sheets, deep derivatives desks and long experience managing swaps. Yet tighter capital and risk requirements have created openings for nonbank firms that can provide financing where banks may be more selective.

Ripple Prime is part of a broader group of nonbank firms seeking business in this area, alongside names such as Jane Street and Clear Street. The shift does not mean banks are leaving the market, but it does show that institutional financing is becoming more competitive. Funds seeking leverage may look beyond traditional bank counterparties when pricing, balance sheet availability or product coverage make nonbank providers attractive.

Ripple’s Hidden Road acquisition gave it the infrastructure needed to compete in this environment. Prime brokerage is not simply a lending function. It involves clearing, custody relationships, transaction processing, financing arrangements and cross-asset operational support. For clients such as hedge funds and ETF issuers, reliability and risk management can be as important as headline financing terms.

The company’s Delta One launch in August added another important piece. Ripple said the business would offer total return swaps tied to U.S. stocks, market indexes and digital assets. At the time, Ripple said the operation had more than $1 billion in regulatory net capital and had completed a $275 million senior debt offering to help finance further growth. Those details underscore that the move into leveraged ETF financing is a capital-intensive expansion rather than a small side business.

Brevan Howard Agreement Adds Institutional Momentum

Ripple Prime has also announced an expanded agreement with hedge fund manager Brevan Howard. Under that arrangement, Ripple Prime will provide brokerage, clearing and financing services across multiple asset classes. The agreement reinforces Ripple’s strategy of building a broader institutional services platform that can serve clients operating across traditional markets and digital assets.

For a crypto company, relationships with large institutional clients can be strategically important. They can validate operational capabilities, deepen market access and create cross-asset business opportunities. Prime brokerage clients often require financing, execution support, margin services and clearing across multiple venues and asset classes, making the relationship broader than a single transaction or product.

The expanded Brevan Howard agreement also fits the direction of Ripple Prime’s Delta One business. Delta One desks typically focus on instruments that provide exposure to the performance of an underlying asset, such as swaps tied to stocks, indexes or other markets. These products can serve hedge funds, ETF issuers and other institutional investors seeking efficient exposure without directly holding the underlying assets in the same size.

Still, the expansion brings Ripple into a more demanding risk environment. Institutional financing can generate steady fees, but it also requires careful monitoring of collateral, counterparty exposure and hedging. A sharp move in an individual stock can test those controls quickly, particularly when leverage is involved and daily resets require frequent adjustments.

The Risk Behind Leveraged ETF Financing

Leveraged ETFs are designed to multiply daily returns, not to guarantee long-term amplified performance. Because they reset exposure daily, their results over longer periods can differ from a simple multiple of the underlying asset’s cumulative return. Volatility, compounding and rapid price swings can make these products complex for investors and demanding for financing providers.

For firms such as Ripple Prime, the key risk is that sharp stock moves can leave financing providers exposed if a fund’s assets are insufficient to cover losses. Swap providers typically manage this risk through collateral requirements, hedging and position monitoring. However, sudden moves in individual stocks can still create stress, especially when liquidity is limited or price gaps occur.

Single-stock leveraged ETFs can be especially sensitive because they focus exposure on one company rather than spreading risk across a broader index. Products tied to names such as Nvidia or Sandisk may attract active trading because daily moves can be meaningful, but concentrated exposure can also magnify risk. Financing providers must be prepared for both ordinary daily volatility and more extreme market conditions.

The business therefore offers Ripple a dual profile: a new fee stream and a new risk channel. The firm can earn financing income from swap exposure, but it must also manage the consequences of amplified equity-market moves. That balance will be closely watched by market participants as Ripple Prime scales its operations across stocks, indexes and digital assets.

Questions Remain Around XRP and the XRP Ledger

Although Ripple is closely associated with XRP and the XRP Ledger, the leveraged ETF financing business currently raises an important unanswered question: how much, if any, of this activity uses XRP or the XRP Ledger. Ripple has not disclosed how much revenue its leveraged ETF financing generates, and it has not disclosed how much of the activity is connected to XRP or the XRP Ledger.

That distinction matters for crypto market participants. A business line can be strategically important for Ripple as a company without directly translating into on-chain activity or token demand. Institutional financing revenue may strengthen Ripple’s broader financial position, but the relationship between that revenue and XRP utility remains unclear unless the company provides more detail.

For now, the development is best understood as a major institutional expansion by a crypto-linked company into traditional market financing. Ripple Prime is using the Hidden Road platform to compete in a business that supports leveraged ETFs, hedge funds and cross-asset strategies. Whether that activity eventually increases the role of digital asset infrastructure remains a question for future disclosures.

The broader significance is that the boundary between crypto firms and traditional Wall Street businesses continues to blur. Ripple is no longer only associated with payments technology and digital assets. Through Ripple Prime, it is operating in prime brokerage, clearing, financing and swaps, areas that historically belonged to banks and major securities firms. That evolution could shape how institutions view crypto-linked companies in the years ahead.

Frequently Asked Questions (FAQs)

What is Ripple Prime doing in leveraged ETF financing?

Ripple Prime is supplying financing for leveraged stock exchange-traded funds. The business uses instruments such as total return swaps to give funds amplified exposure to stocks and market indexes while Ripple collects financing fees.

How did Ripple enter this business?

Ripple entered the business through its $1.25 billion acquisition of Hidden Road in October 2025. Hidden Road brought a multi-asset prime brokerage platform that clears trades, finances positions and handles transactions across several asset classes.

What is a total return swap?

A total return swap is a financial contract that gives one party the economic return of an underlying asset without requiring direct ownership of the full exposure. In leveraged ETF financing, a broker provides exposure to a stock or index while receiving financing payments from the fund.

Why do leveraged ETFs use swaps?

Leveraged ETFs may use swaps to obtain amplified daily exposure efficiently. Instead of buying all the underlying shares needed to create the desired leverage, a fund can contract with a financing provider that delivers the economic return through a swap.

What example shows Ripple’s financing terms?

The Tradr 2X Long SNDK Daily ETF, which targets twice the daily move of Sandisk, pays Ripple the overnight bank funding rate plus four percentage points on swap exposure. At prevailing rates, that is roughly 8% annualized and separate from the ETF’s management fee.

How large is the leveraged ETF market?

The U.S. market has 593 leveraged ETFs holding more than $256 billion, including 426 funds tracking individual stocks, according to Morningstar Direct data. That scale creates demand for financing providers able to support leveraged exposure.

Why are nonbank firms moving into this area?

Tighter capital and risk requirements have created openings for nonbank firms in a market long dominated by major banks and securities firms. Ripple Prime, Jane Street and Clear Street are among the nonbank firms active in this broader financing landscape.

What are the risks for Ripple Prime?

The main risk is that sharp moves in individual stocks or indexes can leave financing firms exposed if a fund’s assets are not enough to cover losses. Leveraged ETFs reset daily, so financing providers must closely manage collateral, hedging and counterparty exposure.

Does this business directly use XRP?

Ripple has not disclosed how much revenue leveraged ETF financing generates or how much of that activity uses XRP or the XRP Ledger. Until more detail is provided, the direct connection between this business and XRP remains unclear.