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Ripple Prime is financing leveraged stock ETFs through total return swaps, entering a market traditionally dominated by banks and securities firms. Ripple gained the prime brokerage operation through its $1.25 billion acquisition of Hidden Road in October 2025, and now provides funds with amplified exposure to stocks and indexes.
A fund targeting twice Nvidia’s daily return can use a swap to gain exposure instead of buying twice its assets in shares. The Journal reported that the Tradr 2X Long SNDK Daily ETF pays Ripple the overnight bank funding rate plus four percentage points, an annualized rate of roughly 8% at prevailing rates. That financing charge is separate from the ETF’s management fee.
Why it matters
Leveraged ETFs offer Ripple a source of fee income tied to stock trading and institutional finance, extending its business beyond digital assets. The U.S. market has 593 leveraged ETFs holding more than $256 billion, including 426 funds tracking individual stocks, according to Morningstar Direct data.
Banks have traditionally supplied much of the financing, but tighter capital and risk requirements have created openings for nonbank firms such as Ripple Prime, Jane Street and Clear Street. Ripple launched its Delta One business in August, offering swaps tied to U.S. stocks, indexes and digital assets. The company said it had more than $1 billion in regulatory net capital and completed a $275 million senior debt offering to support growth.
Market impact
The opportunity comes with exposure to sharp market moves. Leveraged ETFs reset their exposure daily, and a sudden move in an underlying stock can leave a financing firm exposed if the fund’s assets do not cover losses.
Ripple has also expanded its agreement with hedge fund manager Brevan Howard, providing brokerage, clearing and financing across multiple asset classes. The company has not disclosed revenue from leveraged ETF financing or how much of the activity uses XRP or the XRP Ledger.
Frequently asked questions
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How does Ripple Prime finance leveraged stock ETFs?
It provides total return swaps that give funds amplified exposure to stocks and indexes without requiring them to buy the equivalent amount of shares.
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What rate does the Tradr 2X Long SNDK Daily ETF pay Ripple?
The ETF pays the overnight bank funding rate plus four percentage points, which the report put at roughly 8% annualized at prevailing rates. This is separate from its management fee.
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How large is the U.S. leveraged ETF market?
The U.S. market has 593 leveraged ETFs holding more than $256 billion, including 426 funds tracking individual stocks, according to Morningstar Direct data.
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Why are nonbank firms gaining ground in leveraged ETF financing?
Tighter capital and risk requirements have created openings for nonbank firms, including Ripple Prime, Jane Street and Clear Street.
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What risk does leveraged ETF financing create for Ripple?
Leveraged ETFs reset exposure daily. Sharp moves in an underlying stock can leave financing firms exposed if a fund’s assets are insufficient to cover losses.
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