Ripple has entered a business long dominated by banks and prime brokers on Wall Street: financing leveraged stock ETFs.
CoinDesk, citing The Wall Street Journal, reported that Ripple Prime, Ripple’s institutional brokerage arm, has formally moved into financing services for leveraged equity ETFs. For investors seeking amplified single-day returns through products such as 2x long ETFs, fund issuers need to borrow capital from financial institutions to maintain leverage exposure and pay ongoing financing costs.
One example in the report was a Tradr 2x long SanDisk fund. It pays an overnight bank benchmark rate plus a 4 percentage point premium, which translates to roughly 8% annualized at current market levels. In practical terms, retail investors pay for volatility and decay on the front end, while the capital provider on the back end collects a steady liquidity premium.
A Wall Street business built through a $1.25 billion acquisition
Ripple’s entry into the market came through an acquisition.
According to the article, Ripple spent $1.25 billion in 2025 to buy Hidden Road, then renamed it Ripple Prime after the transaction closed in October. Through that entity, funds can trade, clear and borrow financing without having to line up separate counterparties for each asset class.
The contracts involved are total return swaps. A broker provides a fund with the economic return tied to a stock’s moves, while the fund pays a financing fee. The broker then manages its risk through holdings such as the underlying shares. When retail traders buy leveraged ETFs on an exchange, those products are tied to this institutional arrangement behind the scenes.
That business model matters. Traders own the fund, but the broker is selling leverage. The more money flows into strategies tied to stock moves, the more financing those funds need, and the more room there is for Ripple Prime to charge for that service.
Ripple formally launched swap services tied to U.S. equities, indexes and digital assets on Aug. 27 this year. On Oct. 6, hedge fund manager Brevan Howard expanded its relationship with Ripple by adopting its cross-asset brokerage, clearing and financing services. The latest report adds client and pricing detail, showing that the licenses, staff and institutional relationships obtained in the acquisition are already being put to work.
XRP has not followed the business news higher
XRP did not show a clear price response to the development, at least in the timeframe cited in the article.
At the time of publication on Oct. 8, XRP was about $1.41, down roughly 3.8% over the past 24 hours and about 6.5% over the past seven days. The article also noted that XRP closed around $1.49 on Sept. 30 and was about $1.42 on Oct. 7. There was no obvious front-running rally before the report appeared.
The piece frames the issue in simple terms: new fiat revenue earned by Ripple at the corporate level does not, under the current setup, automatically create real buy-side demand for XRP.
The financing income goes to Ripple Prime, not to XRP holders
Under the arrangements disclosed so far, the financing revenue is collected by Ripple Prime. Holding XRP does not entitle investors to any share of that interest income, and the business announcement did not say the proceeds would be used to buy back XRP. New clients, at least first, expand Ripple’s operating business rather than the token’s built-in demand.
When Ripple announced the Hidden Road acquisition, it also described how the brokerage could connect with its own products. The plan included using the dollar stablecoin RLUSD as collateral and moving part of the post-trade process onto the XRP Ledger. Funds could manage collateral with a stablecoin, while brokers could cut settlement and operational costs through the ledger.
For XRP itself, the more direct connection is institutional ownership and trading activity. Ripple Prime already offers OTC spot trading in XRP, and institutions can manage margin across spot holdings and other digital-asset positions. If new clients raise their XRP allocations through those services, capital would then reach the token market.
If firms only use the ledger, the demand effect is much smaller. The standard base fee for a regular transaction is 0.00001 XRP, and that amount is burned after payment. A new account currently needs to hold 1 XRP in reserve. At the standard base fee, 1 million regular transactions would burn only 10 XRP. The low cost may help institutional adoption, but it also shows why a large stock-financing business does not directly convert into large XRP consumption.
Profitability still depends on the cost side
Financing operations also need funding.
Ripple Prime has disclosed regulatory net capital of more than $1 billion. In August, it issued $275 million in senior unsecured notes, and it had previously obtained $200 million in debt financing. The roughly 8% financing fee paid by clients is not pure profit. Funding costs, hedging costs and operating expenses still have to be deducted, and only what remains would count as earnings. The article says it is still too early to know how profitable the business will be after those costs.
The XRP supply setup remains unchanged
The article also says the new stock-financing line does not alter XRP’s supply mechanics.
There are currently about 63.093 billion XRP in circulation. A June 30 snapshot shown on Ripple’s website indicated that about 32.6 billion XRP remained in escrow. Those escrowed tokens are released monthly, and any unused portion is placed back into escrow for later months. The stock-financing business did not disclose any requirement for additional XRP lockups.
That leaves XRP buyers with a specific bet. Anyone buying the token on the back of this news is effectively betting that Ripple’s new institutional clients will also become XRP users over time. But simply holding XRP does not give investors the financing interest paid by leveraged U.S. equity funds such as the SanDisk product mentioned in the report, nor is this a model in which the business directly buys back the token.
The article’s closing point is that many older crypto projects are moving closer to traditional finance as a business decision. That shift, however, does not mean legacy tokens are automatically folded into the economics of the updated business model.