TL;DR
- Ripple Prime has begun financing leveraged ETFs that allow investors to multiply the daily movements of stocks and market indexes.
- Ripple’s $1.25 billion acquisition of Hidden Road allowed the company to enter a market traditionally dominated by major banks.
- The U.S. market has 593 leveraged ETFs managing more than $256 billion, according to Morningstar Direct data.
Ripple has expanded its financial operations into the leveraged exchange-traded fund (ETF) market, a business historically dominated by banks and major securities firms. Through its Prime division, the company provides financing to funds seeking to amplify the daily movements of stocks and market indexes.
As reported by The Wall Street Journal, Ripple entered this business through its $1.25 billion acquisition of Hidden Road, completed in October 2025.
The deal brought an institutional prime brokerage firm specializing in trade clearing, position financing, and transactions involving stocks, bonds, currencies, and digital assets into Ripple’s operations.
Ripple Prime Collects Fees for Financing Leveraged ETFs
Leveraged ETFs use financial instruments to generate returns equivalent to two or more times the daily movement of certain assets.
For example, a fund seeking to double Nvidia’s daily return can use a contract known as a total return swap, rather than directly purchasing twice its exposure in shares.
In these transactions, Prime provides the financial exposure and collects a financing fee, while managing the associated risks through other trades.
One of its clients is the Tradr 2X Long SNDK Daily ETF, designed to deliver twice the daily movement of Sandisk shares.
According to the report, this fund pays Ripple the overnight bank funding rate plus four percentage points. This translates into an annualized rate of approximately 8%, calculated on the swap exposure and separate from the ETF‘s management fee.
A Market Worth More Than $256 Billion
The United States currently has 593 leveraged ETFs managing more than $256 billion, including 426 funds tied to individual stocks, according to Morningstar Direct.
Stricter regulatory capital and risk management requirements for banks have created opportunities for nonbank firms such as Ripple Prime, Jane Street, and Clear Street.
Ripple launched its Delta One business in August, offering total return swaps linked to U.S. stocks, market indexes, and digital assets.
At the time, the company reported having more than $1 billion in regulatory net capital and completing a $275 million senior debt offering to finance its expansion.
It also recently expanded its agreement with Brevan Howard, under which Prime will provide brokerage, clearing, and financing services across different asset classes.
The firm has not yet disclosed how much revenue it generates from financing these products or what proportion of its operations uses XRP or the XRP Ledger.
