Ripple is moving deeper into a part of Wall Street traditionally served by large banks and securities firms: financing funds that seek amplified daily returns from individual stocks and market indexes. Through its Ripple Prime division, the crypto company is providing funding through total return swaps, earning fees from institutional trading activity while taking on risks linked to sharp market moves.
According to CoinDesk, Ripple’s entry into the business followed its $1.25 billion acquisition of Hidden Road, a multi-asset prime brokerage firm, in October 2025. Hidden Road gave Ripple an established platform for clearing trades, financing investment positions and processing transactions across stocks, bonds, currencies and digital assets.
The expansion illustrates how Ripple is using a prime brokerage operation to build services beyond its cryptocurrency activities. However, the company has not disclosed how much revenue comes from financing leveraged exchange-traded funds, or how much of that business involves XRP or the XRP Ledger.
How the financing works
Leveraged ETFs are designed to seek a multiple of an asset’s daily price movement. A fund targeting twice the daily performance of a stock such as Nvidia, for example, does not necessarily need to purchase twice the value of Nvidia shares. Instead, it can use a derivative contract known as a total return swap.
Under such an arrangement, a broker provides the fund with economic exposure to the stock or index. The broker generally manages its own market risk through share purchases or other trades, while charging the fund a financing fee. This structure allows the ETF to obtain leveraged exposure without holding the full position directly.
The Wall Street Journal reported that the Tradr 2X Long SNDK Daily ETF, which targets twice the daily movement of memory-chip company Sandisk, pays Ripple the overnight bank funding rate plus four percentage points. At prevailing rates, that represents an annualized financing cost of about 8% on the swap exposure. The charge is separate from the ETF’s management fee.
The financing cost is one way Ripple can generate fee income from stock-market activity. It also shows that the company’s role is not limited to providing trading access: Ripple Prime is supplying capital and brokerage infrastructure to funds using leveraged strategies.
A growing market with risks
The U.S. leveraged ETF market has expanded to 593 funds holding more than $256 billion, according to Morningstar Direct data cited in the report. Of those funds, 426 track individual stocks rather than broader market indexes.
Leveraged ETFs reset their exposure each day. That daily reset is central to how the products seek to achieve their stated multiple, but it also means their performance over longer periods can differ significantly from simply multiplying an underlying asset’s overall return. In this business, rapid price movements can also create risks for the firms providing financing.
If a stock moves sharply against a leveraged fund, the fund’s assets may not be sufficient to cover its losses. That can leave the financing provider exposed. The potential for losses is particularly relevant when the underlying asset is an individual stock, whose daily moves can be larger than those of a diversified index.
Banks have historically supplied much of the financing for this market. Tighter capital and risk requirements have created opportunities for nonbank firms, including Ripple Prime, Jane Street and Clear Street, to compete in the area.
Ripple’s broader prime brokerage push
Ripple launched its Delta One business in August, offering total return swaps linked to U.S. stocks, market indexes and digital assets. The company said at the time that the operation had more than $1 billion in regulatory net capital. It also completed a $275 million senior debt offering intended to help finance further growth.
The company has continued to expand its institutional relationships. On Tuesday, Ripple announced an enlarged agreement with hedge fund manager Brevan Howard. Under the arrangement, Ripple Prime will provide brokerage, clearing and financing services across multiple asset classes.
The Hidden Road acquisition therefore gave Ripple more than a way to enter traditional financial markets. It provided an operating base for services that connect institutional investors with financing, settlement and execution across several types of assets.
The strategy also leaves unanswered questions about the connection between Ripple’s traditional-market activities and its crypto ecosystem. The source material does not specify how much of the leveraged ETF financing is settled using XRP or operates on the XRP Ledger. For now, the disclosed economics center on financing fees tied to stock and index exposure.
Moneyiar market picture
Moneyiar data at 08:58-08:59 on October 8, 2026, showed XRP at $1.4101752215, down 3.61% over 24 hours and 5.14% over seven days. DAI was priced at $0.9999729096, up 0.07% over 24 hours and 0.01% over seven days.
Compound stood at $23.730012376, gaining 2.13% over 24 hours but falling 3.12% over seven days. The Sandbox traded at $0.0729089967, up 0.77% in 24 hours and 66.44% over seven days.
