Ripple is earning fees financing leveraged stock bets, a business long run by banks — SkimNews
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- Ripple Prime is financing leveraged stock ETFs via total return swaps that give funds amplified daily exposure to stocks and indexes without buying the underlying shares, collecting financing fees for hedging the exposure.
- Ripple entered the business through its $1.25 billion acquisition of Hidden Road, completed in October 2025, which gave it a multi-asset prime brokerage operation that clears trades and finances positions across stocks, bonds, currencies and digital assets.
- The Tradr 2X Long SNDK Daily ETF targeting twice the daily move of Sandisk pays Ripple the overnight bank funding rate plus four percentage points, putting the annualized financing rate at roughly 8% on the swap exposure, separate from the ETF's management fee.
- The U.S. leveraged ETF market now has 593 funds holding more than $256 billion in assets, including 426 funds tracking individual stocks, according to Morningstar Direct data.
- Tighter bank capital and risk requirements have pushed prime brokers out of segments of the trade, opening the business to nonbank firms including Ripple Prime, Jane Street and Clear Street.
- Ripple launched its Delta One business in August with more than $1 billion in regulatory net capital and a $275 million senior debt offering, and on Tuesday expanded its agreement with hedge fund manager Brevan Howard for multi-asset brokerage, clearing and financing.
- Ripple has not disclosed how much revenue its leveraged ETF financing generates or how much of the activity uses XRP or the XRP Ledger, leaving the unit's earnings contribution and token linkage opaque.
Why it matters: The Hidden Road deal converts Ripple from a payments-and-stablecoin story into a Wall Street prime broker competing for a slice of a $256 billion leveraged-ETF market that banks have been retreating from under tighter capital rules — generating fee income Ripple hasn't quantified, while exposing the firm to daily-reset losses if volatile single-stock names like Sandisk or Nvidia gap against swap positions.
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