Ripple is expanding its presence in traditional markets by financing leveraged exchange-traded funds, entering a business that has historically been dominated by banks and major securities firms.
The company’s $1.25 billion acquisition of Hidden Road has given Ripple access to a segment of Wall Street where funds pay for financing to increase their exposure to daily moves in stocks such as Nvidia and Sandisk.
According to a Wall Street Journal report Wednesday, Ripple Prime, the company’s prime brokerage operation, provides financing to funds designed to magnify daily returns on individual stocks and market indexes.
Ripple acquired multi-asset prime brokerage firm Hidden Road in October 2025. The transaction brought an established business that provides trade clearing, investment financing and transaction services across equities, bonds, currencies and digital assets.
One way leveraged funds obtain amplified exposure is through total return swaps. A fund seeking twice Nvidia’s daily performance, for example, can use a swap rather than purchasing twice the amount of Nvidia shares.
Under the arrangement, a broker provides the desired market exposure and typically offsets its risk through stock purchases or other trades. The broker then earns a financing fee from the fund.
The Journal reported that the Tradr 2X Long SNDK Daily ETF, which seeks to deliver twice the daily movement of memory-chip company Sandisk, pays Ripple the overnight bank funding rate plus four percentage points.
With current rates, the financing cost works out to approximately 8% on an annualized basis. That cost is applied to the swap exposure and comes in addition to the ETF’s management fee.
The leveraged ETF market in the U.S. has become sizable. Morningstar Direct data shows 593 leveraged ETFs holding more than $256 billion, with 426 of those funds tracking individual stocks.
Banks have traditionally been major providers of financing for these products. More stringent capital and risk requirements, however, have helped create room for nonbank firms such as Ripple Prime, Jane Street and Clear Street.
Ripple launched its Delta One business in August, offering total return swaps connected to U.S. equities, market indexes and digital assets. At the time, the company said the operation had more than $1 billion in regulatory net capital. Ripple also completed a $275 million senior debt offering to support further growth.
The company has continued building its institutional business. On Tuesday, Ripple announced an expanded agreement with hedge fund manager Brevan Howard, under which Ripple Prime will provide brokerage, clearing and financing services across several asset classes.
Leveraged ETFs adjust their exposure each day, which can create additional risks for financing providers when a sharp move in an underlying stock leaves a fund without enough assets to cover potential losses.
For Ripple, leveraged ETF financing provides another source of fee income tied to institutional stock trading and financing. The company has not disclosed the revenue generated by the business, nor has it said how much of the activity involves XRP or the XRP Ledger.
