Ripple has expanded into financing leveraged stock exchange-traded funds, moving into a corner of Wall Street that has long been dominated by large banks and securities firms.
According to a Wall Street Journal report published Wednesday and cited by CoinDesk, Ripple Prime, the company’s prime brokerage unit, is supplying financing for funds that let investors multiply the daily moves of individual stocks and market indexes.
Ripple entered the business through its $1.25 billion acquisition of Hidden Road, a multi-asset prime brokerage firm, in October 2025. The deal gave Ripple an established platform that clears trades, finances investment positions, and processes transactions across stocks, bonds, currencies, and digital assets.
Total return swaps sit at the center of the trade
The financing is being provided through total return swaps, which let leveraged ETFs gain amplified exposure without directly buying multiples of the underlying shares.
A fund that promises twice the daily return of Nvidia, for example, can use a total return swap instead of purchasing twice its assets in Nvidia stock. The broker provides that exposure, usually hedging its own risk through stock purchases or other trades, and collects a financing fee from the fund.
The Journal said the Tradr 2X Long SNDK Daily ETF, which targets twice the daily movement of memory-chip maker Sandisk, pays Ripple the overnight bank funding rate plus four percentage points. That benchmark reflects what banks pay to borrow overnight.
At prevailing rates, that puts the annualized financing cost at roughly 8%. The charge applies to the swap exposure and is separate from the ETF’s management fee.
A growing market with room for nonbank firms
Morningstar Direct data shows the U.S. market now has 593 leveraged ETFs holding more than $256 billion in assets. Of those, 426 track individual stocks.
Banks have traditionally supplied much of this financing. But tighter capital and risk requirements have created openings for nonbank firms, including Ripple Prime, Jane Street, and Clear Street.
Ripple’s broader push in institutional financing
Ripple launched its Delta One business in August, offering total return swaps tied to U.S. stocks, market indexes, and digital assets. At the time, the company said the operation had more than $1 billion in regulatory net capital. It also said it had completed a $275 million senior debt offering to help fund further growth.
On Tuesday, Ripple 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.
New fee income, but not without risk
The business gives Ripple a new source of fee income tied to stock trading and institutional financing. It also exposes the company to the mechanics and risks of leveraged ETF funding.
Leveraged ETFs reset their exposure every day. Sharp moves in individual stocks can leave financing providers exposed if a fund’s assets are not sufficient to cover losses.
Ripple has not disclosed how much revenue its leveraged ETF financing business generates. It also has not said how much of that activity uses XRP or the XRP Ledger.