ZetaPeakThe crypto company's $1.25 billion acquisition of Hidden Road has opened a corner of Wall Street where funds pay to amplify daily moves in stocks such as Nvidia and Sandisk.
Ripple is earning fees financing leveraged stock bets, a business long run by banks
The crypto company's $1.25 billion acquisition of Hidden Road has opened a corner of Wall Street where funds pay to amplify daily moves in stocks such as Nvidia and Sandisk.
Ripple Prime is financing leveraged stock exchange-traded funds, expanding into a market traditionally dominated by major banks and securities firms. Ripple entered the business through its $1.25 billion acquisition of Hidden Road and now provides total return swaps that can give funds amplified exposure to stocks and indexes. The fast-growing leveraged ETF market offers Ripple a new source of fee income but carries risks because sharp stock moves can leave financing firms exposed to losses.
Ripple is expanding into the business of financing leveraged stock exchange-traded funds, putting the crypto company in a market long dominated by major banks and securities firms.
Its prime brokerage division, Ripple Prime, is supplying financing for funds that let investors multiply the daily moves of individual stocks and market indexes, according to a Wall Street Journal report Wednesday.
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 operation that clears trades, finances investment positions and handles transactions across stocks, bonds, currencies and digital assets.
A fund promising twice the daily return of Nvidia can enter into a financial contract called a total return swap rather than buying twice its assets in Nvidia shares. A broker provides the exposure, typically hedging its own risk through stock purchases or other trades, while collecting a financing fee from the fund.
The Journal reported that 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 — a benchmark for what banks pay to borrow overnight — plus four percentage points.
That puts the annualized financing rate at roughly 8% at prevailing rates, charged on the swap exposure and separate from the ETF's management fee.
The U.S. market now 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 this financing, but tighter capital and risk requirements have created openings for nonbank firms including Ripple Prime, Jane Street and Clear Street.
Ripple launched its Delta One business in August, offering total return swaps tied to U.S. stocks, market indexes and digital assets. It said at the time the operation had more than $1 billion in regulatory net capital, and it had completed a $275 million senior debt offering to help finance further growth.
Meanwhile, the company announced an expanded agreement on Tuesday with hedge fund manager Brevan Howard, under which Ripple Prime will provide brokerage, clearing and financing services across multiple asset classes.
Leveraged ETFs reset their exposure daily, and sharp moves in individual stocks can leave financing firms exposed if a fund's assets are insufficient to cover losses.
The business gives Ripple fee income tied to stock trading and institutional financing. As such, the company has still not disclosed how much revenue its leveraged ETF financing generates or how much of that activity uses XRP or the XRP Ledger.
Newsletters
1Bitcoin loans are paying for tuition and working capital, not just trades, lenders say1 hour ago 2Ethereum’s Glamsterdam test runs near 200 million gas per block after upgrade2 hours ago 3Bitcoin breaks below $83,000 as oil jumps on Iran strike-plan report3 hours ago 4Crypto news site Cointelegraph seeks buyer after web traffic plunges6 hours ago 5Wells Fargo in talks with Kraken parent Payward for crypto trading liquidity12 hours ago 6Polygon taps TRON’s $94 billion stablecoin supply for seamless cross-border transfers14 hours ago 7Gate bets all-in-one money app is crypto’s biggest consumer trend this year and next15 hours ago 8Crypto Long & Short: Zcash and the case for privacy in the age of AI16 hours ago 9Tether tapped by Kazakhstan’s central bank to explore stablecoin and tokenization 16 hours ago 10Quantum computers threaten exposed private keys rather than blockchains, Europol warns17 hours ago
The Definitive Stablecoin Landscape Series: Asia Pacific
The Definitive Stablecoin Landscape Series: Asia Pacific
As stablecoins move into regulated finance, APAC is becoming a key proving ground. This report maps the region’s rules, use cases, and RLUSD’s role.
As stablecoins move into regulated finance, APAC is becoming a key proving ground. This report maps the region’s rules, use cases, and RLUSD’s role.
Why it matters:
As stablecoins move into regulated finance, APAC is becoming a key proving ground. This report maps the region’s rules, use cases, and RLUSD’s role.
Bitcoin loans are paying for tuition and working capital, not just trades, lenders say
Bitcoin breaks below $83,000 as oil jumps on Iran strike-plan report
Ether is about to lose a steady buyer as Tom Lee says Bitmine will stop token purchases