Ripple is now earning fees financing leveraged stock ETFs, competing directly in a business long reserved for major banks and securities firms. According to a Wall Street Journal report Wednesday, the crypto company's prime brokerage arm, Ripple Prime, supplies the financing that lets funds multiply daily moves in stocks such as Nvidia and Sandisk.

Ripple entered the market through its $1.25 billion acquisition of Hidden Road, a multi-asset prime brokerage, completed in October 2025. The purchase delivered an established operation that clears trades, finances positions and processes transactions across stocks, bonds, currencies and digital assets.

How does the financing actually work?

A fund promising twice Nvidia's daily return does not need to buy double its assets in Nvidia shares. Instead, it enters a total return swap with a broker, which provides the exposure and typically hedges its own risk through stock purchases or other trades while collecting a financing fee.

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 plus four percentage points. At prevailing rates, that puts the annualized financing cost near 8%, charged on swap exposure and separate from the ETF's own management fee.

The structure converts Ripple's balance sheet into a recurring fee engine tied to institutional borrowing, but the risk cuts both ways.

How big is the market?

The U.S. leveraged ETF universe has grown to 593 funds holding more than $256 billion in assets, according to Morningstar Direct data. Of those, 426 funds track individual stocks — the fastest-growing and most volatile segment, since single-name leverage amplifies gap risk.

Banks traditionally supplied most of this financing. Tighter capital and risk requirements have pushed them to retreat, creating openings for nonbank financing firms. Ripple Prime now competes there alongside Jane Street and Clear Street.

What infrastructure did Ripple already build?

Ripple launched its Delta One business in August, offering total return swaps tied to U.S. stocks, market indexes and digital assets. At launch, the company said the operation held more than $1 billion in regulatory net capital and had completed a $275 million senior debt offering to fund further growth.

On Tuesday, Ripple announced an expanded agreement with hedge fund manager Brevan Howard. Under the deal, Ripple Prime provides brokerage, clearing and financing services across multiple asset classes for the firm.

What are the operational risks?

Leveraged ETFs reset their exposure every trading day. A sharp move in an underlying stock can leave the financing firm holding losses if the fund's assets prove insufficient to cover the swing — the same tail risk that keeps banks selective about which funds they finance.

The company has not disclosed how much revenue its leveraged ETF financing generates, nor how much of that activity runs through XRP or the XRP Ledger. Until Ripple reports segment-level figures, the scale of its Wall Street financing desk will remain opaque to the market — a disclosure question that will sharpen as the $256 billion leveraged ETF sector keeps drawing nonbank financiers into the space.