Ripple is making a bold move into the leveraged exchange-traded fund (ETF) market, a sector traditionally controlled by major banks and securities firms. Through its prime brokerage arm, Ripple Prime, the company is now providing financing for leveraged ETFs, which offer investors amplified exposure to stocks and indexes. This expansion comes after Ripple's $1.25 billion acquisition of Hidden Road in October 2025, which gave it a foothold in the multi-asset prime brokerage space.
The leveraged ETF market has grown rapidly, with 593 such funds holding over $256 billion in assets, according to Morningstar Direct data. Ripple Prime is supplying total return swaps, which allow funds to gain amplified exposure without directly buying the underlying assets. For example, the Tradr 2X Long SNDK Daily ETF, which targets twice the daily movement of Sandisk, pays Ripple the overnight bank funding rate plus four percentage points, resulting in an annualized financing rate of roughly 8%.
While this new business line provides Ripple with a fresh source of fee income, it also comes with significant risks. Sharp moves in individual stocks can leave financing firms exposed to losses if a fund's assets are insufficient to cover them. Despite this, Ripple has been aggressive in expanding its offerings, launching its Delta One business in August and securing a $275 million senior debt offering to support further growth.
Ripple has also strengthened its partnership with hedge fund manager Brevan Howard, providing brokerage, clearing, and financing services across multiple asset classes. However, the company has not disclosed how much revenue its leveraged ETF financing generates or how much of that activity uses XRP or the XRP Ledger.