Ripple Earns Fees by Financing Leveraged Stock Bets Once Dominated by Banks

Ripple is moving deeper into a part of Wall Street where investment funds pay for financing that allows them to magnify daily moves in stocks such as Nvidia and Sandisk.

The crypto company entered the market through its $1.25 billion purchase of Hidden Road, giving Ripple access to a business traditionally dominated by major banks and securities firms.

Ripple Prime, the company’s prime brokerage arm, now provides financing to funds that seek to amplify the daily performance of individual stocks and market indexes, according to a Wall Street Journal report published Wednesday.

Ripple completed its acquisition of Hidden Road, a multi-asset prime brokerage firm, in October 2025. The transaction gave Ripple an established platform for clearing trades, financing positions and processing transactions across equities, bonds, currencies and digital assets.

Leveraged funds can use financial contracts known as total return swaps to gain amplified exposure without purchasing a proportionally larger amount of the underlying stock. For example, a fund targeting twice Nvidia’s daily return can use a swap instead of buying twice as many Nvidia shares.

In such arrangements, a broker provides the market exposure and generally manages its own risk through stock purchases or other transactions. In return, the broker collects a financing fee.

The Journal reported that the Tradr 2X Long SNDK Daily ETF, which seeks to deliver twice the daily move of memory-chip company Sandisk, pays Ripple an overnight bank funding rate plus four percentage points. The benchmark reflects the rate banks pay to borrow money overnight.

At current rates, that translates into an annualized financing cost of roughly 8%. The charge applies to the swap exposure and is separate from the ETF’s management fee.

The U.S. leveraged ETF market has grown substantially. Morningstar Direct data shows 593 leveraged ETFs with more than $256 billion in assets, including 426 funds that track individual stocks.

Banks have historically provided much of the financing for these products. However, tighter capital and risk requirements have created opportunities for nonbank firms such as Ripple Prime, Jane Street and Clear Street.

Ripple formally launched its Delta One business in August, offering total return swaps linked to U.S. stocks, market indexes and digital assets. The company said the operation had more than $1 billion in regulatory net capital and had completed a $275 million senior debt offering to support additional expansion.

Ripple is also broadening its institutional relationships. On Tuesday, the company announced an expanded agreement 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 positions each day, meaning sharp movements in individual stocks can create risks for financing providers if a fund’s assets are not sufficient to cover losses.

For Ripple, the business creates a source of fee revenue connected to stock trading and institutional financing. However, the company has not disclosed how much revenue comes from financing leveraged ETFs or what portion, if any, of that activity involves XRP or the XRP Ledger.

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