Ripple expands into leveraged ETF financing through Ripple Prime

Ripple’s institutional arm, Ripple Prime, has begun offering financing for leveraged exchange-traded funds (ETFs). The service, launched after the firm bought Hidden Road for $1.25 billion in October 2025, lets fund managers obtain amplified exposure to stocks and indexes without purchasing the underlying shares.

How total-return swaps work for leveraged ETFs

A leveraged ETF can achieve twice-daily returns by entering a total-return swap with a broker. The broker supplies the economic exposure and typically hedges its own position, while charging a financing fee. One example cited is a swap linked to a 2× daily Sandisk ETF, which pays the overnight bank funding rate plus an additional four percentage points, translating to roughly an 8% annualised financing cost under current rates.

Size of the leveraged-ETF market and competitive landscape

Morningstar Direct data shows the United States hosts 593 leveraged ETFs with a combined asset base exceeding $256 billion, of which 426 track individual equities. Historically, banks have provided most of the financing, but tighter capital rules have created space for non-bank players such as Ripple Prime, Jane Street and Clear Street.

Risks and revenue implications for Ripple

Leveraged ETFs reset exposure each day, meaning sharp price moves can leave the financing provider vulnerable if a fund’s collateral falls short. While Ripple has not disclosed the exact revenue generated from this activity, the service adds a fee-based income line tied to stock trading and institutional financing. The company previously announced a $275 million senior-debt issuance and reported more than $1 billion in regulatory net capital to support the expansion.

Why it matters

By entering a sector previously dominated by traditional banks, Ripple diversifies its business model and taps a multi-billion-dollar market. The initiative showcases how crypto-adjacent firms can leverage their technology and capital to compete in mainstream finance, but it also introduces new exposure to equity-market volatility that could affect Ripple’s financial performance.