Ripple is establishing a foothold in the financing of leveraged stock ETFs, expanding its prime brokerage business into an area historically controlled by banks and large securities firms.
The move follows Ripple’s $1.25 billion acquisition of Hidden Road, which brought the crypto company into a segment of Wall Street where funds pay financing costs to increase their exposure to daily stock and index movements.
Ripple Prime, the company’s prime brokerage division, provides financing to funds that seek to multiply the daily performance of individual stocks and broader market indexes, according to a Wall Street Journal report published Wednesday.
Ripple acquired Hidden Road, a multi-asset prime brokerage firm, in October 2025. The acquisition added an established operation that clears trades, finances investment positions and facilitates transactions across stocks, bonds, foreign exchange and digital assets.
Leveraged funds can gain amplified exposure through total return swaps rather than buying a larger amount of the underlying shares. For instance, a fund targeting twice Nvidia’s daily return can use a swap to obtain that exposure without purchasing twice its holdings in Nvidia stock.
The broker provides the exposure and generally hedges the associated risk through stock purchases or other market transactions. In exchange, it receives a financing fee.
The Wall Street Journal reported that the Tradr 2X Long SNDK Daily ETF, which targets twice the daily performance of memory-chip maker Sandisk, pays Ripple the overnight bank funding rate plus four percentage points.
At current rates, that results in an annualized financing cost of around 8%. The fee is charged against the swap exposure and is separate from the ETF’s management fee.
The market for leveraged ETFs has expanded significantly. Morningstar Direct data shows 593 leveraged ETFs in the U.S. with more than $256 billion in assets. Of those, 426 funds track individual stocks.
Banks have historically provided much of the financing required by these products. However, stricter capital and risk rules have opened opportunities for nonbank providers such as Ripple Prime, Jane Street and Clear Street.
Ripple launched its Delta One business in August, offering total return swaps tied to U.S. stocks, indexes and digital assets. The company said at launch that the business had more than $1 billion in regulatory net capital and that Ripple had raised $275 million through a senior debt offering to support its expansion.
Ripple is also growing its relationships with institutional investors. On Tuesday, the company announced an expanded agreement with hedge fund manager Brevan Howard, under which Ripple Prime will offer brokerage, clearing and financing services across multiple asset classes.
The structure of leveraged ETFs creates risks for financing providers because the funds reset their exposure each day. Large moves in individual stocks can leave a lender exposed if the fund’s collateral is not sufficient to absorb losses.
For Ripple, the business adds fee-based revenue from stock trading and institutional financing. The company has not said how much revenue comes from leveraged ETF financing or disclosed how much of the activity involves XRP or the XRP Ledger.
